China: Soy consumption to rise in 2008 leading to more imports from Brazil

4 February 2008

Beijing, China, 4 Feb – Chinese imports of soy oil, namely from Brazil, by September 2008 will account for 45 percent of the entire world trade of the product, as compared with 25 percent in 2001, according to Chinese figures for the sector.

Wang Yinji, the director-general of Cofco, China’s biggest cooking oil broker, told the Chinese press that this was positive news for Brazil, which is the biggest exporter of soy to China.

Soy is the biggest Brazilian export to the Chinese market and the rise in demand in the Asian market makes life more comfortable for Brazil’s producers, according to a survey by consultancy Céleres, with grain prices reaching record highs on the Chicago futures exchange.

China is the biggest importer of Brazilian soy, and in 2007 bought a third of Brazil’s total production, against 27 percent in 2006.

According to figures from the Brazilian Agriculture Ministry, soy beans led Brazilian goods exports, with the sale of US$11.38 billion in 2007.

China, which is the world’s largest consumer of soy oil, will drastically increase its imports after a fall in the domestic production of soy, which led to a 50 percent rise in the price of the product in the first ten months of 2007, Wang said.

According to Wang, speaking to the Shanghai Daily, China is facing numerous difficulties to maintain the price of the grain, as well as that of cooking oils.

The rise in prices, Wang said, was also due to low Chinese production, which is restricted by the scarcity of arable land.

Soy oil, Wang said, will remain as the main oil product in China, with estimates of 41 percent of the market in 2010, against 37 percent at the moment.

“Economic growth in China tends to increase the consumption of vegetable oil as with increased quality of life, consumers choose better quality foods,” Wang said.

The domestic prices of soy oil in China reached 1,000 yuan (US$139.2) per ton, which is higher than the record set in 1994, according to sector sources, which project that Beijing will acquire a total of 500,000 to 5 million tons of soy on the international market. (macauhub)