China will remain a strong buyer of soybeans through 2009 as it builds up domestic reserves and imports soy to meet the demands of its expanding meat sector, a top Bunge executive said May 18.
“We do expect China to be a significant buyer throughout the remainder of this year and on into the future,” Carl Hausmann, president and chief executive officer of Bunge North America, told Reuters on the sidelines of the World Agricultural Forum, a food industry gathering in St. Louis.
Chicago Board of Trade benchmark soybean prices pushed to a seven-month high recently, with export demand a prime factor.
U.S. soybean export sales this marketing year are up 13 per cent from a year ago at 32.8 million tonnes, largely due to China’s appetite for soybeans remaining strong despite the world economic slowdown.
U.S. soybean sales to China this season are up 42 per cent from a year ago at 18.3 million tonnes.
“China is difficult to really forecast exactly what the Chinese government, the Chinese buyers, will do,” Hausmann told Reuters. “But even if they were to reduce building their push to increase reserves, China has a big import requirement for soybeans, protein meal to feed their domestic meat production industry, principally pork but also poultry.”
Tight world supplies of soy due to recent drought in Argentina, the world’s third-largest soy exporter after the United States and Brazil, has been the biggest driver of U.S. soy demand from China this season.
“There is somewhere in the area of 15 to 20 million tonnes of soybeans that the world thought just four months ago would be available from South America that are not available today,” Hausmann said.
“We would expect exports out of the United States will remain very strong. Because of that, there is an increased need for strong production in the U.S.,” he said.
“If the U. S were to have a significant crop shortfall like Argentina, this would be a much more significant concern for world food security,” Hausmann added.