China's Jan-Feb soybean imports rise 4.4% but expected to slow

By Mei Mei Chu

BEIJING, March 7 (Reuters) - China's soybean imports rose in the first two months of the year, as supplies from the United States booked before U.S. President Donald Trump took office arrived, but traders said they could drop in March.

Imports for January and February combined climbed 4.4% to 13.61 million metric tons, customs data showed, in line with market expectations. CNC-SOY-IMP

China combines data for January and February to smooth out the impact of the Lunar New Year holiday, which may fall in either month in a given year.

Importers purchased larger-than-usual shipments of U.S. supply last year due to worries about the potential for renewed U.S.-China tensions to hit agriculture trade, but arrivals had been delayed due to slower customs clearance at Chinese ports.

High domestic crush rates and delays in Brazilian soybean shipments have tightened China's oilseed supplies, leading to the market's most severe supply squeeze in recent years and prompting many crushers to suspend operations through to April, traders said.

"Brazilian soybean shipments to China have been delayed and coupled with Chinese crushers operating with a relatively high soybean crush utilisation rate in recent months to meet soymeal demand, domestic soybean stocks have been falling," said Cheang Kang Wei, assistant vice president at StoneX in Singapore.

The tightness has worsened with buyers avoiding U.S supplies due to an escalating trade war between Washington and Beijing.

March imports are expected to be less than 6 million tons, said Wan Chengzhi, analyst at Capital Jingdu Futures.

That compares with 5.54 million tons in March last year.

China this week slapped an additional 10% levy on U.S soybeans and blocked imports from three U.S firms in retaliation against Trump's tariffs on Chinese goods.

Beijing said on Wednesday it will expand the coverage of full-cost insurance and production income insurance for soybeans this year, and reduce the use of soybean meal in feed production.