SIEM REAP: Demand for soybeans from top importer China has slowed in the past few weeks, with bookings for November running at only half of levels seen a year ago, due to the recent devaluation of the yuan that has made overseas purchases expensive, traders said.
Imports of the oilseed are coming under further pressure as the price of soybean products like soymeal have not risen much in yuan terms, making it uneconomical for crushers to use soy priced in a stronger dollar, they said on Wednesday.
Lower demand from China and worries about the economic health of the country, where stock markets have seen a brutal meltdown this week, have pushed US soybean prices to a more than six-year low of $8.55 a bushel.
"Buying has really slowed in the past couple of weeks as there is a lot of uncertainty in the market," said one trader on the sidelines of a grains industry conference in Siem Reap.
China has so far booked about 2 million tonnes for November arrival, versus nearly 4 million tonnes covered by this time last year, said the trader, who did not want to be named because of rules on talking to media. Another trader said December bookings were largely open with importers shying away from the market.
This bodes ill for US exporters as the country is expecting a bumper output this year.
US soybean exports have been weak at less than 10 million tonnes so far this year, the slowest pace in five years.
Shipments will come under more pressure as South American soybean producers are expected to dominate the Chinese market in the last quarter of 2015 - typically the peak marketing season for the United States.
China imported a record 9.5 million tonnes of soybeans in July, up 17.4 percent from June, according to customs data.
The country is likely to import a record 76 million tonnes of the oilseed in the year ending September, up 8 percent from the previous year, according to an estimate from the China National Grain and Oils Information Center.
If the price of soymeal in yuan terms improves, it will help crushing margins as well as cushion the impact of slowing demand on China's imports, traders said.
"If meal prices don't show an increase, then processors will have to suffer losses," the first trader said. "Soymeal and soyoil prices should rise as the dollar is much stronger than yuan."
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