China, the top soybean importer, is forecast to increase its imports in the 2023/24 season (+2.0% y-o-y to 100 million metric tonnes); however, slow economic growth within the country has become a determining factor. In China, the overall Consumer Price Index rose by just 0.1% y-o-y, the slowest level of growth in around two years, down from 0.7% in March. Market participants stated that China is on the verge of deflation, driven by weak demand. With employment in the country also at the lowest level in three months, household spending is still limited. The April inflation data means that potential cuts to interest rates, currently at 3.65%, remain a watch-out factor as the government seeks to encourage spending. Additionally, while soybean import demand is set to rise in China, the growth rate is declining, as crush has slowed in the previous five years, as reported by the USDA.
The stricter quarantine checks imposed by Chinese customs on soybean imports in April continued to cause delays and longer waiting times for ships, with a Mintec source reporting that this has resulted in mould growing on some crops. However, another source added that “this could be a rumour linked to a specific cargo rather than something more widespread.”