Last March, China imported considerably less soy from Brazil and much more from the US. This is evident from data published today (Tuesday, April 20) from Chinese customs. Rain in Brazil has considerably slowed down the harvest and thus the export of soy. The Chinese have therefore imported much more soy from the US. US soybean imports have more than tripled since March 2020.
The world's largest soy importer imported 315.334 tons of soy from Brazil in March. That is 85% less than in the same period last year when 2,1 million tons were imported. China imported 7,18 million tons of soy from the US. Last year this was 1,71 million tons in March. Total Chinese soy imports amount to 7,77 million tons, 82% more than last year.
Does demand persist?
There is some uncertainty among several analysts as to whether the high Chinese demand for soy will last. Soy consumption is highly dependent on a rapid recovery of the pig herd. Recent reports of a 20% reduction in breeding sows in northern China due to African swine fever cast doubt on the recovery of the pig herd. The increased use of wheat in animal feed is also unfavorable for soy.
This does not alter the fact that Brazilians are concerned about the consequences of the high demand for and high prices of, among other things, soy. The country was betting on a drop in corn and soy prices later in the season. However, that doesn't seem to be happening. The Brazilian Ministry of Agriculture therefore announced yesterday (Monday, April 19) that there will be no import duties on corn and soy until the end of this year. The government is taking this measure to curb rising inflation, which is driven by high commodity prices.
"International commodity prices are on the rise," the Brazilian ministry told Reuters. "Domestic prices continue to rise due to strong foreign demand and a decline in the local currency, the real, against the dollar." According to various experts, US soy and corn growers in particular will benefit from this measure.