In August, China imported a record 12.14 million metric tons of soybeans, marking a 29% increase from 9.43 million tons in the same month last year. This surge in imports is attributed to traders capitalizing on lower prices amid concerns about potential trade tensions with the United States if Donald Trump were to return to the presidency.
Analysts noted that the increase was partly due to delayed shipments from previous months finally clearing customs. Rosa Wang from Shanghai-based agro-consultancy JCI highlighted that low Chicago soybean prices have provided an excellent opportunity for large purchases, while buyers are also preparing for possible high tariffs.
For the first eight months of the year, total soybean arrivals reached 70.48 million tons, up 2.8% year-on-year. However, the influx of soybeans has contributed to an oversupply in China, where a struggling economy has weakened the demand for meat and dairy products.
Domestic inventories of soybeans and soybean meal remain high, although there has been a slight decline. Agriculture consultancy MySteel indicated that it will take time to balance the supply and demand for soybean meal, prolonging the bottom cycle of its prices.
Despite rising costs of imported soybeans boosting September crush margins in Rizhao, processors are still facing losses of approximately 300 yuan ($42.17) per ton.
Looking ahead, Brazilian soybean farmers are projected to produce 14% more in the 2024/2025 season compared to the previous one, driven by expectations of increased rainfall in the last quarter of the year.