Devaluation of RMB leads to higher costs and slower soybean imports

Demand from China, the leading importer of soybeans, has slowed in recent weeks, with orders for November soyabeans so far only half what they were a year earlier, as the recent devaluation of the renminbi has made overseas imports expensive.

The price of soybean meal priced in RMB has not risen much, putting more pressure on soybean imports, traders said. This is not economical for crushers when the dollar is stronger.

Weak demand in China and worrying economic growth have caused U. S. soybean prices to fall to $8.55 a bushel, their lowest level in more than six years.

A trader said on the sidelines of a grain industry conference in Siem Reap, Cambodia that the pace of Chinese procurement had slowed in recent weeks because of uncertainty in the market. So far, China has ordered about 2 million tons of soybeans that arrived in November, compared with nearly 4 million tons in the same period last year, according to the trader, who spoke on condition of anonymity.

Another trader said that the ordering of soybeans in December had basically not yet begun, and importers left the market to wait and see. This is bad for U. S. exporters because U. S. soybean production is expected to be bumper this year, but so far this year, U. S. soybean exports have been weak, with less than 10 million tons, the lowest in the same period in five years.

South American soybean growers will dominate the Chinese market in the last quarter of 2015 (which is usually the peak season for US soybean sales), which could put more pressure on US soybean exports.

China's soybean imports reached a record 9.5 million tons in July, up 27.1% from a year earlier, according to statistics released by the General Administration of Customs. Of this total, 6.37 million tons of soybeans were imported from Brazil, 2.28 million tons from Argentina and 760000 tons from Uruguay, while only 57000 tons were imported from the United States.