CASDE: China to import 96m mt of soybean in 2017/18 at $472-503/mt

China, the world’s biggest buyer of soybeans, will import 96 million mt during the October 2017 through September 2018 crop year, up 2.6% on the previous year, according to China’s January analysis of supply and demand estimates.

The import figure is unchanged from December’s estimate, although domestic production is expected to decrease 290,000 mt to 14.6 million mt, down 290,000 mt due to a downward revision in the forecasted planted area of 95,000 hectares to 8.1 million.

With total consumption estimates unchanged at 110.6 million mt, the shortfall from production will be drawn from stocks.

China expects to pay between CNY 3,050-3,250 /mt for its beans, which at current exchange rates amounts to $472-503/mt and is unchanged from its December estimate.

Once VAT, import tax and port handling costs are deducted, that equates to a CIF price of around $395-422/mt or a US Gulf FOB price of around $351-378/mt ($9.50-10.26/bu) using a $44/mt freight rate.

That compares with Agricensus assessments of cargoes loading in February at the US Gulf at $368.25/mt FOB and landing in Northeast China at $407.50/mt.

Corn

“Recent weather in South America has improved, global soybean production is expected to be high, and US soybean futures prices have come down,” the report said.

In terms of corn, China expects to import 200,000 mt more over the period compared to its December estimate.

China, which is believed to be sitting on stockpiles of more than 250 million mt of corn, is expected to import 1.2 million mt this year.

That compares with consumption and production of 221 million mt.

“It is estimated that the average wholesale price of corn in the domestic production area will be maintained at CNY 1,600-1,700/mt, mainly due to the high inventory control,” the report said,adding import values were expected at around CNY 1,550-1,650/mt.

At current exchange rates, that amounts to $240-255/m CIF, including taxes and VAT.