China's Jan-Feb soybean imports rise 14% on year to 13.51 mil mt

China -- the world's largest soybean purchaser -- bought 13.51 million mt of beans in January and February, up 14.2% year on year, China's customs data showed Saturday.

China's soybean purchase showed a hike in the first two months of 2020 due to the delayed customs clearance of soybean cargoes bought in December last year, sources said. Additionally, China's Phase 1 trade deal commitments have also spurred demand for US beans.

Under the US-China Phase 1 trade deal, signed on January 15, Beijing has pledged to buy $80 billion worth of US agro products in two years, including soybeans, which has been the primary trade item between the two nations.

China's soybean demand is forecast to rise as high as 90 million mt in 2020, up 9% on the year, amid the Phase 1 trade deal and a consolidating pork industry, which has started rebuilding hog stocks that have been affected by the African swine fever outbreak since August 2018, according to S&P Global Platts Analytics.

The country processes over 80% of the imported soybeans into high-protein animal and bird feed to meet its burgeoning domestic demand for meat products.

China -- the world's largest pork producer and consumer -- lost almost 50% of its hog inventory due to the ASF. According to the US Department of Agriculture, the impact of the ASF has started to dissipate in 2020 amid the consolidation of the pork industry.

However, the coronavirus outbreak, which has already killed over 3,000 people, could derail the soybean demand recovery in China and delay the Phase 1 deal. The country's business supply chain has been halted for the past few weeks because of contagion fear.

Coronavirus has forced the government to impose heavy travel and transport restrictions across the country, severely restricting the flow of commodities, including soybeans and its derivatives, one trade source said. If the curbs continue, the Phase 1 trade deal could also be affected, the source added.

The USDA echoed a similar sentiment on the impact of the coronavirus outbreak on the Phase 1 trade deal.

"The current outlook for exports to China is tempered by significant uncertainties surrounding the COVID-19 outbreak, which may affect the timing of China's purchases under the Phase 1 agreement during the calendar year 2020," the USDA said in its 2020 agricultural outlook report in February.