Total imports for March came to 6.85 million tonnes, according to the General Administration of Customs, making the first quarter number 23 million tonnes, up 13.5% from a year earlier and the highest for the period. "I think there was probably an expectation in December of demand coming back. The demand recovery has generally disappointed, but if an importer bought cargoes in December or January, they're arriving in March," said Darin Friedrichs, founder of Shanghai-based Sitonia Consulting.
Though the March arrivals were lower than February, an unusual decline, imports are expected to pick up again in April and May to well over 9 million tonnes each month, according to analysts and traders, further weighing on soymeal prices.
Soybeans are crushed to make soybean meal, one of the major ingredients in animal feed and needed in large quantities for China's huge hog herd.
Hog farmers, however, have been losing money since the start of the year, with hog prices hovering around 15 yuan ($2.18) per kg, pressured by weak demand and excess supply. "China's pig farming is less profitable now, which is not conducive to the short-term demand for soybean meal," said a Chinese futures analyst, who asked to remain anonymous. Soymeal prices are already down by around a third since hitting a four-year high last November. Crushers are reducing their soybean import plans in response to the weaker demand, and purchases after May could be lower than in previous years, an analyst at Donghai Futures told Reuters, declining to be named because of company policy.
($1 = 6.8826 yuan) (Reporting by Qin Ningwei and Dominique Patton; Editing by Muralikumar Anantharaman and Tom Hogue)
