China’s Soybean Imports Surged in May on Buying From Brazil

Soybean imports by China rose 27% in May from a year earlier, after crushers increased purchases from Brazil to take advantage of cheap supplies amid strong crush margins.

• The country shipped in 9.4 million tons in May, compared with 7.4 million tons in the same month last year, and 6.7 million tons in April, according to customs data Sunday
  • That’s close to the record 10.08 million tons in July 2017
• Imports in the first five months rose 6.8% to 33.9 million tons

Key Insights

• Chinese imports could stay close to record levels until July, as crushers buy aggressively from top supplier Brazil due to a bumper harvest and the depreciation of the local currency earlier this year
• NOTE: Brazil Soybean Exports to China Rose 60% Y/y in May
• Crushers haven’t bought enough to cover their needs for the fourth quarter, the peak sales season for the U.S. crop
  • Escalating tensions with Washington have seen a partial halt to U.S. soybean purchases
  • Beijing is lagging on its phase-one trade deal pledges to buy more U.S. farm goods
  • China expected to buy more U.S. soy for state reserves
  • U.S. Trade Representative Robert Lighthizer said last week he feels “very good” about the progress of the phase one trade agreement with China, which he said is honoring the pact amid the coronavirus pandemic.