Soybean shipments to China are increasing again amid demand for poultry and aquaculture feed after purchases from the biggest buyer dropped earlier this year because of bird flu, a Bloomberg News survey shows.
Imports in the 12 months through Sept. 30 may reach 66 million metric tons, compared with 60 million tons a year earlier, according to the median of the survey of seven China- based researchers and crushers. The U.S. Department of Agriculture projected Chinese imports of 69 million tons, it said last week.
Demand dropped in the first quarter following outbreaks of H7N9 avian influenza and as economic growth slowed, causing losses in the animal husbandry and soybean crushing industries. That raised concerns that some traders may cancel orders, with the U.S. Soybean Export Council last month estimating possible defaults on as much as 2 million tons of cargoes.
"The market hit the bottom and has got its footing now for a recovery," said Liu Xianwu, the general manager of China Cereals & Oils Business Net, a Beijing-based researcher. "The situation has improved and people who said they were going to default on orders seem to be changing their minds."
Soybeans for July delivery in Chicago rose 0.5 percent to $14.7225 a bushel at 3:51 p.m. Beijing time. Futures gained 14 percent this year, partly driven by advance purchases from China.
Soybean meal on the Dalian Commodity Exchange fell 0.2 percent to close at 3,629 yuan a ton. The protein ingredient has climbed 7.8 percent this year.
Shipments in the second quarter may total 19 million tons, up 27 percent from the three months through March, according to data from Beijing-based advisory company UniRich Investment Management Ltd.
Seasonal restocking of inventories by fish farms and other aquaculture producers is the biggest driver of demand now, said Tommy Xiao, an analyst at Shanghai JC Intelligence Co. Rising egg prices contributed to purchases from poultry farms, he said.
The most-active egg futures on the Dalian exchange jumped 8.7 percent in the last month, and closed 0.8 percent higher at 5,189 yuan a ton today.