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UPDATE 1-China soy imports lower than expected in June, drop from May
July 13, 2017 / 3:51 AM / 5 months ago

UPDATE 1-China soy imports lower than expected in June, drop from May

* Imports down 20 pct from May, but up slightly on year

* Plentiful stocks curb demand for imports

* Shipments should increase in July -analyst (Adds detail, background)

BEIJING, July 13 (Reuters) - China’s soybean imports dropped from the month before to 7.69 million tonnes in June, below market expectations due to plentiful stocks at crushers and a change in taxes, Reuters calculations based on customs data showed.

That volume was down 20 percent from a record 9.59 million tonnes in May, but up 1.7 percent from 7.56 million tonnes in June last year, figures from the General Administration of Customs of China showed.

Soy imports for the first-half of 2017 stood at 44.81 million tonnes, up 14.2 percent from the same period last year, the customs data showed on Thursday.

“The market had expected June imports to be over 8.5 million tonnes at least,” said Liang Yong, analyst with Galaxy Futures.

“But crushers have very high stocks so they had to delay discharging the soybeans. And many were probably waiting to discharge after July 1, due to the change of VAT policy,”

China decided to reduce its value added tax on soybeans to 11 percent from 13 percent from July 1.

The policy change and huge purchases of soybeans in recent months have caused congestion at major ports along China’s coast, pushing up stockpiles to multi-year high. The situation is expected to continue with around 8.5 million to 9 million tonnes due to arrive this month.

But analysts said large arrivals would come in eventually, pressuring crush margins in the world’s top buyer of the oilseed, where margins have just climbed to positive territory this month, supported by strong U.S. soybean prices.

Crushers in Shandong province, a major production hub in the country’s east, now make 37 yuan on each tonne of soybeans processed as of Tuesday, up from a loss of over 300 yuan ($44.24) in June. JCI-SBMG-SHDNI

“Stocks of soymeal and soyoil are still very high. And demand from feed producers is not that strong. Imports are expected to go up in July, pressuring crush margins,” said Tian Hao, senior analyst with First Futures. ($1 = 6.7815 Chinese yuan renminbi) (Reporting by Hallie Gu and Dominique Patton; Editing by Sunil Nair and Joseph Radford)

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