Chinese Crop Imports End Strong Year on Weak Note

By CnAgri2013-01-22 11:06:22 Print

China's crop imports ended a strong year on a weak note, amid depressed crush margins for some processors, well below highs earlier in 2012 which fuelled demand for foreign supplies.

China's imports of corn last year near-tripled to a record 5.21m tonnes, with rice buy-ins also setting an all-time high by rising 305% to 2.34m tonnes, data from the General Administration of Customs said.

Wheat buy-ins tripled to 3.69m tonnes � mainly from Australia, from where purchases soared to 2.43m tonnes from 281,000 tonnes in 2011.

Among soft commodities, coffee imports rose by one-third, to 57,585 tonnes, while sugar buy-ins rose 28% to 3.75m tonnes.

For wheat, imports plunged 97% from December 2011 levels to 5,527 tonnes, while halving for corn, and barley.

The rate of increase in rice buy-ins remained robust, at 257%, but below its year average.

Soybean imports eased to a 9.9% rate of increase, from a year-average of 11.3%, while growth in rapeseed buy-ins slowed to a crawl, and in soymeal to a trade 800 tonnes, - down 98% year on year.

Import data also deteriorating sharply for cocoa, cotton and sugar.

'Looming positive risk'

The weak close to 2012 reflected in part improved domestic production of some agricultural commodities, including sugar, for which China enjoyed strong beet and cane harvests last year, as flagged by Associated British Foods on Thursday.

However, for some crops demand appears to have been hit by weakened domestic processing margins - as in cotton, for which a policy of supporting prices has, while supporting farmers' returns, hurt mill profits.

Morgan Stanley said on Monday that "China provides a looming positive risk to cotton prices, as the country's reserve purchase/minimum support price programme pushes commercial demand to foreign origins".

Chinese cotton consumption in 2012-13 will fall 2.5m bales to 35.5m bales, according to the US Department of Agriculture.

'The big shock'

For corn, Chinese users not, like state traders, benefiting from VAT exemptions were better off relying on domestic supplies towards the end of the year, Morgan Stanley data showed.

And in soybeans, while imports remain the best bet for all users, crush margins fell below a negative 500 remninbi per tonne of the oilseed towards the end of last year.Processors have tried a range of strategies in an effort to improve their fortunes, including finding foreign buyers for their soymeal.

"The big shock to the meal market was the introduction of China as a large scale seller of soymeal," Macquarie said on Monday.(Source:Agrimoney.com(transshipment))