China’s soybean imports in May fell 15% from the record levels seen a year ago, reaching 10.22 million metric tons, according to customs data. This was below the expected arrivals of 11-12 million tons.
The decline in May imports can be attributed to disruptions to Brazil’s soybean harvest due to floods, which have impacted the delivery of freshly harvested soybeans to drying and storage units. Brazil is the top supplier of soybeans to China.
However, the May imports were higher than April’s shipment volumes, as good crush margins supported demand for cheaper Brazilian beans. Rising hog prices in China, the world’s largest pork market, have also boosted demand for soybeans, which are crushed into soymeal for animal feed.
In the first five months of 2024, China’s soybean imports totaled 37.37 million tons, 5.4% lower than the same period a year ago.
Analysts expect China’s June soybean imports to be around 11 million metric tons, lower than the previous estimate of 12 million tons, as the impact of the floods in Brazil continues to be felt.
Despite the decline in May, China took delivery of 50,000 tons of deforestation and conversion-free (DCF) Brazilian soybeans on May 31, marking a milestone for the country, which has historically prioritized price over sustainability in its farm imports.
The drop in soybean imports also comes as China’s first food security law aimed at achieving “absolute self-sufficiency” in staple grains came into effect on Saturday, reinforcing the country’s efforts to lower its reliance on overseas purchases.