China is expected to import a record 24.5 million tonnes of soybeans in the 2004-05, a massive 45 per cent higher than the 16.9 million tonnes imported in 2003-04, according to the China National Grain and Oils Information Center (CNOGIC).
Domestic edible oil demand, due at around 18 million tonnes in the 2004-05 marketing year, is estimated to outstrip local supply by around 4 million to 5 million tonnes, which will be largely filled by crushing imported soybeans, CNOGIC said.
China's increasingly affluent consumers are transforming China's food sector, both domestically and in foreign trade: pushing up demand for food commodities and food products from around the world.
According to new figures from market research body IGD, China will become the world's second largest food retail market by 2020, behind the US.
In 2003 the Chinese food market was 35 per cent of the size of the US market; by 2020 this will figure will rise to a considerable 82 per cent.
The country's 1.3 billion consumers have the power to sway global market prices. And the latest CNOGIC data certainly implies soybeans are still vulnerable.
While stocks are just starting to pick up for soybeans and consequently a slight relief in prices, over the past four years inventories for this increasingly popular commodity fell to 30 year lows: prices are therefore still exposed to an upside risk.
Figures released this week from the American Soybean Association show that July bean futures closed up $2.11 finishing at $247.37; August was $2.39 higher, closing at $248.48 and September gained $2.02 ending at $249.03.
July oil closed $3.31 higher to finish at $509.92; August increased $3.53, closing at $512.35; and September gained $3.53, ending at $514.77.