Soybean imports to reach record level

China's soybean imports are expected to reach record highs in the coming year, according to forecasts released on Wednesday by the China National Grain and Oils Information Center.

Already the world's largest soybean importing country, imports are expected to hit 66 million metric tons during the 2013-14 market year (September 2013 to August 2014).

In 2012, China's soybean imports jumped by 11.2 percent from the previous year to 58.4 million tons. The US Department of Agriculture recently predicted China's imports of the beans will jump to 69 million tons during the period, while putting import volumes for the current market year at 59 million tons.

Chinese agricultural experts and industry analysts suggest those estimates are overblown, but agree there is strong upward pressure on the country's soybean imports, caused by reduced domestic output and price discrepancies between domestic and imported beans.

According to the center's figures, the country's soybean production this year is likely to drop by 3.9 percent from a year ago to 12.3 million tons, which would mark the third year running of reduced output.

The amount of area dedicated to growing the beans is also expected to decline, by 3.7 percent, the center said, after the area shrank by 14.4 percent the previous year.

"Reduced output would induce more imports to China," the center concluded.

Chinese farmers currently plant non-genetically modified varieties, whose production per hectare is no more than half of the genetically modified ones grown in the United States, Brazil and Argentina.

At the same time, domestically grown beans are not as productive as imported ones, in terms of the amount of oil produced.

High soybean prices in the domestic market have also made imported beans more attractive to grain traders.

"Given the price discrepancy between domestic and global markets, international imports can be very lucrative," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd.