China is expected to produce 4.4M tonnes more soyabeans in the 2017/2018 season, a boost in production not seen in many years, Artem Hammerschmidt, a senior analyst at Oil World told the Black Sea Oil Trade conference in Ukraine on 19 September.
As a result, China was not expected to raise its imports of soyabeans in the next 12 months, which would have a significant impact on the oilseed market.
“This season, China is expected to produce 16-17M tonnes of soyabeans, maybe even 18-20M tonnes, compared with in 11.5M tonnes in 2016/17,” Hammerschmidt said.
“This growth in production will cover China’s growth in consumption and imports will stagnate, although still remain at a high level of 93M tonnes.”
The boost in soyabean plantings had not been seen in many years and was the result of farmers being encouraged to switch from corn to oilseeds because of a large corn surplus, he added.
The stagnation of Chinese imports would have a significant impact on market sentiment and would have a bearish factor on the soya market.
Warren Patterson, a commodities strategist at ING Bank, added that the Chinese government had set a soyabean production target of 19M tonnes for 2020.
China itself was a super power in terms of world oilseed imports, accounting for some 57% of global oilseed imports, Hammerschmidt said.
In terms of the global oilseed market, he forecast a moderate decline in production of the world’s 10 major oilseeds to total 560M tonnes for 2017/18. This compares to 286M tonnes in 1997/98.
The biggest growth could be seen in Brazil. Its production of soyabeans accounted for 12% of global production of oilseeds in 1997/98, but this was expected to rise to 20% for the forecast 2017/18 period.
Brazil was also a super power in terms of global oilseed exports, accounting for 37% of exports in 2017/18. This was equal to the USA and Canada’s exports combined.
Because of a prospective decline in global rapeseed and sunflower seed production in 2017/18, the global oilseed market would be depending more on soyabeans, with a forecast 119M tonnes of production, an increase of 1.8% compared to the previous year.