Chinese Imports of Soybeans and Pork Surged During December

Posted on Tue, 01/14/2020 - 10:07

China’s imports from the U.S. rebounded in November and December as warming relations between the country boosted companies’ confidence, according to Zou Zhiwu, deputy head of China’s General Administration of Customs In December, Zou says China imported 14.1 billion yuan ($2 billion) worth of U.S. ag goods, driven in large part by strong purchases of soybeans and pork. 

Chinese soybean imports surged to 9.54 MMT in December, a dramatic 67% increase from year-ago and a 19-month high. Monica Tu, an analyst with Shanghai JC Intelligence Co Ltd., explains the figure was inflated as “some delayed cargoes cleared customs, including U.S. shipments.” She added that China also booked “quite a lot of South American beans, which arrived en masse.”

China imported 88.51 MMT of soybeans for all of 2019, a slight improvement from 2018’s 88.03 MMT, but still down from levels before African swine fever (ASF) slashed the country’s hog herd.

Looking ahead, S&P Global Platts Analytics forecasts Chinese soybean demand could climb to 90 MMT in 2019-20, a 6% (5-MMT) increase from USDA’s latest forecast for this season. The country’s hog production has been recovering rapidly, laying a solid foundation for better soybean demand in 2020, the firm explains.

Large pig farming companies have started to consolidate and most small and medium-sized operators were wiped out altogether. Large farms are better equipped to manage pig inventories and biosecurity. It typically takes around six months for soybean demands to pick up after sow herds begin to recover.

ASF has also spurred strong Chinese pork imports, with shipments soaring in December amid an easing of trade tensions with the U.S. and a lifting of tariffs on shipments of the meat. China’s December pork imports of 375,000 MT nearly quadrupled last year’s imports of 95,384 MT for the month, according to Reuters’ calculations of customs data released today. This is also up sharply from shipments of 229,707 MT in November. China ramped up its pork imports preceding its peak Lunar New Year consumption period. For all of 2019, China imported 2.108 MMT, a 75% surge from year-ago.

China’s beef imports also soared 80.6% from year-ago to 189,000 MT, a marginal increase from November. The country’s beef imports for 2019 stand at 1.66 MMT, nearly a 60% rise from 2018.

China’s overall exports to the U.S. fell 12.5% from 2018 to $418.5 billion, while its imports from the U.S. fell 20.9% from year-ago to $122.7 billion for all of 2019, resulting in a trade surplus with the U.S. of $295.8 billion last year. That’s down from a record $323.3 billion in 2018.