New Delhi — China's soybean imports from the United States plunged 56% year on year in June, while purchases from Brazil rose 91% on year, as the South American country accelerated its shipments on the back of a weakening currency.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
China imported 267,553 mt of soybeans from the US in June, down from 614,805 mt same period last year, China's customs data showed July 26. In May, China's bean imports from the US hit 491,461 mt.
China's soybean imports from Brazil in June increased to 10.3 million mt from 5.5 million mt in the same period last year, according to the data. China's imports of Brazilian beans in May were 8.86 million mt.
China's total soybean imports in June reached 11.2 million mt, according to the customs data.
Weak currency boosts Brazilian shipments
Brazil's soybean shipments hit a record pace in April and May on a depreciating Brazilian Real, according to analysts.
Brazilian Real hit an all-time low in May to trade at 5.89 to the US dollar, as the country's central bank was seen battling a deepening economic crisis by making large interest rate cuts.
Brazilian exports also strengthened on the back of the harvest pace, which was in the full swing at the time.
According to Brazilian trade department data, Brazil had shipped a record 15.5 million mt in May, while April shipments were an all-time monthly record, at 16.3 million mt. More than 70% of those shipments were heading to China.
Freight rates from Brazil to China were also lower in April and May, with a 60,000 mt of grain cargo heading from Brazil to China in April hitting this year's low at $19.5/mt, according to S&P Global Platts data. It usually takes more than 30 days for a vessel from Brazil to reach a port in China.
China accelerating purchase of US beans
While China's imports of US soybeans in June were down, as this period is mostly considered lean for US shipments on account of soybean planting progress in the country.
However, China has been recently seen accelerating its purchase of soybeans from the US, with over 3 million mt of flash sales reported only in July.
The sales are seen as part of China's commitments under the Phase 1 Deal reached with the US earlier this year.
China booked 1.7 million mt of US soybeans on July 16, the highest volume contracted at least in a year.
Despite the ongoing political tensions between the two countries, traders are in a wait-and-see mode as analysts believe China is expected to continue seeking US beans to cover its September-October demand.