China’s soybean imports in July rose 8 per cent from a year earlier, to their highest level in almost a year, customs data showed, as importers increased their purchases of Brazilian beans on higher crush margins.
China shipped in 8.64 million tonnes of soybeans in July, up from 8 million in the same month last year, the General Administration of Customs said. That is up 33 per cent from 6.51 million tonnes in June and the highest since August 2018.
China bought 46.91 million tonnes of soybeans in the first seven months of the year, down 11 per cent from last year, customs data showed, amid the trade war and pig disease woes.
Meanwhile the trade war between US and China is helping soya producers in Brazil. The price of Brazilian soybeans in local currency reached the highest level in almost two months, driven by a spike in port premiums for soybeans and a weaker currency, both caused by the trade dispute between China and the United States.
The Brazilian currency fell almost 5% against the dollar this month to almost four to the greenback, making exports even more lucrative for the local producers.
The Chinese demand is likely to rise further. After the escalation of the trade war, they will probably focus on Brazil and even cancel U.S. soybean purchases, traders aver.
Brazilian farmers are taking the opportunity to sell old crop soy and also to clinch some deals to sell next year’s crop that they will start to plant next month, according to producers association Aprosoja.
The soy producers in Brazil are very happy with the developments. Some farmers have also boosted barter deals with suppliers of fertilizers and agrochemicals, already looking to guarantee inputs for the next crop, and taking advantage of better relative prices for the beans. Brazil is expected to increase soybean planted area by 2.3% in the new season, tilling a total of 36.7 million hectares, according to a Reuters poll.