China Peanut Imports Reach Record High in 2019/20

China peanut imports will reach a record high in MY 2019/20, rising to nearly 1.4 million tons and one-third of global trade in peanuts. For the first time, China will be the largest import market, surpassing the next-largest market (the European Union) by more than 40 percent. MY 2019/20 will also be the first year China is a net importer of peanuts. China’s imports in 2020/21 will remain high but are forecast to fall year-on-year due to lower exportable supplies. 

China is the world’s largest producer and consumer of peanuts. Prior to 2014/15, China’s domestic production was largely sufficient to meet steadily rising local demand. In the past 5 years, China has begun importing larger quantities of peanuts, mostly for crushing into meal for feed and oil for food use. While China’s 2019/20 imports are a record high, they will only represent 7 percent of its domestic consumption.

China’s breakneck peanut imports are driven by slow domestic production growth and record-high global beginning stocks in 2019/20 that made imports more attractive. Chinese importers took advantage of all-time-high stocks in Senegal and Sudan as well as large U.S. stocks. Together these three countries account for nearly 90 percent of China’s imports in 2019/20 as of June.

PROJECTION FOR 2020/21 

Global 2020/21 oilseed production is forecast at 610 million tons, up 6 million from July due to a larger soybean crop in the United States offsetting lower sunflowerseed production in Russia and smaller a rapeseed crop in Ukraine. Oilseed trade volumes are up 3 million to 189 million on higher Argentina, Brazil and U.S. soybean exports. China is the main driver for increased exports with imports also raised for India, Egypt and Thailand. Crush is up 3 million on higher China soybean meal consumption. Global ending stocks are down 1 million on lower forecasts for Canada rapeseed in response to stronger export demand in the face of declining competition. 

Protein meal production is up 3 million mostly due to higher China soybean crush. Oil production is up 1 million on increased China soybean crush and higher Indonesia palm oil production. Global trade in meal and oils is marginally higher. The projected U.S. seasonaverage farm price for soybeans is reduced to $8.35 per bushel in response to record supplies following the near record August production forecast.

PROJECTION FOR 2019/20 

Global oilseed production is unchanged at 577 million. Oilseed import volume is up 6 million at 187 million, on higher soybean imports by China, Egypt, India, Thailand, and the EU. Exports are up a similar amount on larger exports by Brazil and Argentina. Crush is 4 million higher largely due to increased soybean crushing in China, Egypt, Thailand and Ukraine. Ending stocks are down 4 million on higher soybean exports forecast for Brazil.

EXPORT PRICES 

Export prices for soybeans and products for all major exporters rose in July. U.S. Gulf FOB soybean export bids in July averaged $364/ton, up $14 from June. Argentina Up River FOB averaged $360/ton, up $14. Brazil Paranagua FOB prices remained high in July and carries over into August on tightening supplies, averaging $378/ton, up $13 from last month. U.S. soybean meal export bids averaged $340/ton, up $6 from June. Brazil and Argentina export prices also strengthened during the first half of July and then fell slightly, averaging slightly above the prior month. Brazil Paranagua FOB averaged $326/ton, up $5 from June, and Argentina Up River FOB averaged $326/ton, up $7. Meal prices strengthened in late July maintaining its prices into early August. Rising oil prices persisted in July. Argentina soybean oil climbed $50 to average $709/ton for the month, while the Brazil average grew $64, to $724. The United States average jumped $54 in July to $707/ton. Palm oil demand continued its rally as COVID-19 restrictions eased. Malaysia palm oil averaged $646/ton, $42 higher than June and Indonesia averaged $630, up $41.

EXPORT SALES

As of the week ending July 30, 2020, U.S. soybean accumulated exports (shipments) to China totaled 13.5 million tons and 21.9 million to the rest of the world. Outstanding sales to China for the current marketing year remains at 2.9 million tons, with just over 4 million outstanding to the rest of the world. However, most sales are being made on new crop, the 2020/21 marketing year. U.S. soybean export commitments (outstanding sales for the current marketing year plus accumulated exports) to China are 2-million-tons higher than last year at 16.4 million, but remain below historic levels on a slow export pace. Total commitments to the world lag behind last year, totaling 46.9 million tons as export commitments to markets outside China remain 11 percent below 2018/19 levels.