China's Dec soybean imports jump 67% on year to 9.54 mil mt

China's soybean imports in December jumped 67% year on year and 15% from November to 9.54 million mt, according to the customs report released Tuesday.

China's soybean imports rose in December as US-origin soy shipments booked during the trade truce in earlier months cleared Chinese customs, industry sources said.

Through calendar year 2019, soybean imports by China totaled 88.5 million mt, up 0.5% year on year, the report showed. The country is the world's largest buyer of soybeans and processes over 80% of its imported beans into high protein animal feed.

AFRICAN SWINE FEVER

China -- also the world's largest pork producer and consumer -- lost over 40% of its pig population from August 2018 due to an outbreak of African swine fever. Simultaneously, the country's demand for soybean-based animal feed dropped drastically.

The outbreak of the highly infectious and incurable ASF hit local pig breeders and soybean crushers hard. However, Chinese pig numbers are expected to recover in 2020 as large pig farming companies have started to consolidate, while most small and medium-sized pig farms have been wiped out after millions of pigs were culled, according to the USDA's October Global Agricultural Information Network report.

China's hog production capacity has continued to recover, with breeding sow herds restocked for three consecutive months since September, according to Chinese Ministry of Agriculture and Rural Affairs. In December, sow herds in China grew 2.2% month on month, it said.

US-CHINA PHASE 1 TRADE DEAL

Two of the world's biggest economies are set to agree on Phase 1 of a trade deal on January 15. However, doubts remain over the pre-conditions set by the two sides for concluding Phase 1.

The Trump administration wants China to commit to buying $40 billion worth of US-origin agro-products annually, including soybeans, which is highly unlikely as China is facing a demand slump because of ASF and an economic slowdown, industry sources said.

China currently imports 80% of its soybeans from Brazil, a source said. So, if the Phase 1 trade deal goes through, China would need to buy most its soybeans from the US, replacing the cheaper Brazilian bean.

The Xi administration has been asking for a lowering of US tariff barriers, prior to the start of trade talks, which could prove to be arduous for the US given the growing mistrust between the two nations on a range of issues, including intellectual property, technology transfer, agriculture, financial services and currency and foreign exchange.