Soybean imports set to slide in H2 as domestic meat demand weakens

Ding Lixin, a researcher at the Chinese Academy of Agricultural Sciences in Beijing, said that imports are likely to sink between August and October, as a surge in imports that started at the end of 2013 has created a glut and cut oil - pressing plants' profits. Inventories at ports now stand at 7.4 million tons.

"Even though the margins of Chinese crushing companies are on the mend, there's limited room for further improvement as soy oil prices are still weak," Ding said. "Importing more soybeans won't effectively improve their financial situation."

Crushers were losing $80 to produce a ton of soy oil in February, but things had improved by July, when they were making a profit of $10 a ton.

Sha Yusheng, deputy secretary-general of the CFIA, said China's feed industry is undergoing rapid consolidation this year, after the majority of feed enterprises posted a loss in 2013. Small and medium-sized companies will continue to face difficulties. Large companies are expanding capacity while also keeping a close eye on costs.

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