Soybean imports are very "injured" and the cost per ship increases by 3 million yuan

On August 11th, the news that Russia would lower tariffs on agricultural products roiled commodity markets.

Coincidentally, the news that the people's Bank of China sharply lowered the RMB midpoint during the same period also made some agricultural products perform differently. Zhuochuang Information told the Securities Daily that due to the devaluation of the RMB, Chicago soybean futures rose 3.5% on Monday and fell 2.6% on Tuesday. In addition to the impact on the futures market, soybean imports are expected to be "very hurt" in the later period. As the largest buyer of soybeans in the world, China's import dependence on soybeans has been more than 50% in the past 15 years, especially in the past six years, the external dependence of Chinese soybeans has exceeded 80%, and in 2014 it was about 86%. Without considering foreign exchange arbitrage, if domestic soybean traders import soybeans according to the latest exchange rate, the cost per ship will increase by about 3 million yuan, although importing enterprises can use foreign exchange arbitrage tools to reduce exchange losses. however, if the RMB continues to depreciate, enterprises' import costs will face the risk of rising sharply.

Soybean imports remain high

A reporter from the Securities Daily learned from Zhuochuang that Russia said that in order to abide by its commitment to the World Trade Organization (WTO), Russia will continue to gradually reduce export tariffs on major oilseeds and will reduce export tariffs on major oilseeds from September 1, 2015. soybean export tariffs will be reduced to zero and rapeseed export tariffs will be reduced to 6.5%, but not less than 11.4 euros per ton. The export tariff on sunflower seeds will be reduced to 9.88%, but not less than 14.81 euros per ton.

In this regard, Zhuo Chuang believes that this may change the pattern of the source of imported soybeans in China.

A reporter from the Securities Daily looked up the data of the General Administration of Customs and found that soybean imports surged in July according to import data. According to the data, soybeans were imported 9.5 million tons in July, while from January to July, imports totaled 44.66 million tons, an increase of 7.1 percent over the same period last year, and a decrease of 19.7 percent over the same period last year.

Looking at the data of other months of this year, we can see that although the data of soybean imports in the first half of this year are repeated and the year-on-year increase or decrease is different, according to the sort of data, the import volume increased significantly in July.

According to media reports, soyabean imports surged, mainly because South American soybeans are cheap, stimulating increased demand from Chinese buyers. The National Grain and Oil Information Center predicts that soybean imports in August and September will total 13 million tons, up from 11.06 million tons in the same period last year.

The surge in imports coincides with the shrinking domestic soybean market, and the National Grain and Oil Information Center expects China's soybean output to fall to 11 million tons next year, down from 12.15 million tons this year.

The news of Russia's tariff reduction is still ringing in our ears, and the devaluation of the RMB has added an alternative meaning to the import and export business of soybeans. "the continuous depreciation of the RMB over the past two days is relatively large, which is of great benefit to foreign trade enterprises. In recent years, the continuous appreciation of China's RMB and the low demand in the international market have had a great impact on China's exports, which fell 8.3% in July compared with the same period last year. After the devaluation of RMB, the price advantage of China's export commodities will be enhanced, which is conducive to the improvement of the performance of foreign trade enterprises. In fact, the main purpose of the central bank's leading devaluation of the renminbi is to promote exports. " Guo Fanli, director of consultancy research at CIC, explained to the Securities Daily that as far as agricultural enterprises are concerned, Guo Fanli believes that enterprises should actively increase the added value of their products and develop middle-and high-end business. The devaluation of RMB is a good time for China's agricultural processing import and export enterprises to reshape their brand image. Agricultural processing import and export enterprises can export some middle and high-end products. Due to the devaluation of RMB, these middle and high-end products are expected to be welcomed by the market because of their high performance-to-price ratio. Once the foreign market has a high recognition of the middle and high-end products exported by China, even if the RMB appreciates in the future, it will not have a great impact on the import and export business of agricultural processing.

Some agricultural analysts explained in an interview with the Securities Daily that the current agricultural production mode determines that domestic soybeans will not recapture the market overnight.

Will continue to show the phenomenon of "concentration to Hong Kong"

The change of soybean market pattern also makes the current market show obvious characteristics. According to the research report from Guotai Junan, China's soybean imports continue to show the phenomenon of "concentrated in Hong Kong". Therefore, China's soybean imports are expected to decline month-on-month in August, but in terms of absolute quantity, they are still expected to be in a high range.

Due to the surge in China's soybean imports in July, it reached the highest monthly import volume in history. Guotai Junan believes that in the first seven months of 2015, there are some key words to follow in the global soybean trade: China's soybean imports dropped month-on-month in August this year, and the import volume is estimated to be about 800-8.5 million tons. China's soybean imports are expected to decline gradually in August.

Now, with the change of Russian soybean export tariff policy, the market pattern may also change. Zhuochuang believes that at present, the main importers of soybeans in China are the United States, Brazil and Argentina. According to import data in the first half of the year, imports from the three countries accounted for 97%, while Russia accounted for only 0.72%. However, affected by the imminent zero tariff on Russian soybean exports, "coupled with the fact that farmers in northeast China tend to plant soybeans in Russia in recent years, it is expected that the number of soybeans imported from Russia will increase in the later period."