A jump in domestic soy output and plentiful state stocks will slow the growth in Chinese demand for the oilseed in 2016/17, said an official Chinese think-tank on Monday, just as the U.S. harvests a record crop.
China is the world’s top buyer of soybeans, typically importing about two thirds of the globally traded volume. Imports have grown each year since 2004, by an average of 5 million tonnes annually, data from the U.S. Department of Agriculture (USDA) shows.
But the jump in demand is likely to slow this year as the domestic crop grows by almost 13% to 13.1 million tonnes, the most in five years, said the China National Grain and Oils Information Center (CNGOIC).
It expects imports in 2016/17 crop year to reach 85 million tonnes, up from 83 million tonnes in the 2015/16 crop year that ends this month.
Weekly sales from state reserves will also add some supply to the domestic market, it said.
China has sold 1.4 million tonnes of reserve soybeans at auctions since mid-July. While appetite has been tepid, the state could continue sales into the upcoming year in a bid to get rid of huge grain stockpiles, said the think-tank.
The USDA recently revised its 2016/17 China soybean import figure down by 1 million tonnes to 86 million tonnes.
“We expect there could be further downward revisions in the future,” said CNGOIC, predicting import volumes of 85 million tonnes.
Imports in the current year may also be lower than forecast at less than 82 million tonnes, an official at the centre said.
Shipments in the current quarter are set to be well below last year’s levels after buyers curbed purchases ahead of state sales while flooding hit soymeal demand.