Soy imports jump 7% in May: customs
China’s export growth remains flat as pandemic dents foreign orders
Published: Jun 07, 2020 08:58 PM

A combine and a grain cart work in a soybean field of Pellett family's farm in Atlantic, a small city in Iowa, the United States, Oct. 16, 2019.Photo:Xinhua

China's soybean imports jumped nearly 7 percent by volume in the first five months of the year, although the country's overall trade was flat from last May, according to statistics released by the General Administration of Customs Sunday. 

From January to May, soybean imports totaled 33.88 million tons, up 6.8 percent year-on-year. The average import price edged down by 1.7 percent to 2,770.2 yuan ($391) per ton, customs data showed. 

The figure could be a sign of progress in the fulfillment of the Phase One trade deal with the US, as China strives to honor its promise of purchasing $80 billion worth of agricultural products in 2020 and 2021, said Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation. 

"At this time of year, soybean exports from the US are usually slow as it is the growing season," Bai said. "But in the past few months, imports of US soybeans have been on a steady rise as part of the effort to fulfill the Phase One deal."

Jiao Shanwei, editor-in-chief of agricultural information portal, said that China's import volume of US soybeans might reach a record high in the autumn, normally the peak season for US soybean sales, because of the Phase One trade deal. 

However, it's hard to predict the underlying trend or trade volume due to political uncertainties between the two countries. 

China has moved to purchase more agricultural products at a time when its own trade sector is facing downward pressure, with both exports and imports having recorded single-digit falls in the first five months this year.

According to the customs data, China's trade dropped 4.9 percent on a yearly basis to 11.54 trillion yuan from January to May. Exports slumped by 4.7 percent to 6.2 trillion yuan while imports fell by 5.2 percent to 5.34 trillion yuan. 

The data showed that China's foreign trade situation remain severe, as export growth slowed considerably in May as a result of shrinking overseas demand. 

China exported 1.46 trillion yuan worth of products in May, up just 1.4 percent year-on-year - a considerable decline from the 8.2-percent growth posted in April. 

According to Bai, export growth in April, which was a pleasant surprise to Chinese market watchers, mostly reflected orders backed up in previous months due to logistics disruptions during the coronavirus epidemic.

But the slowing growth in May shows that the sector faces new headwinds, which is the lack of new export orders as the global COVID-19 pandemic drags on, he said. 

However, some experts saw a bright side to the figures, and that the growth in May, although slight, showed the resilience of China's trade sector. 

"China managed to achieve growth in exports in May after clearing order backlogs, which was better than market expectations. It also shows that many markets have inelastic demand for Chinese products," Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times on Sunday. 

The customs data also showed that although the pandemic has hit exports of daily necessities ranging from clothes to plastics and toys, exports of fabrics surged by 25.5 percent year-on-year in the first five months of the year, as the pandemic spurred demand for medical equipment such as face masks. 

Experts said that pressure would linger for some time on China's trade sector but the situation would improve in the second half of the year. 

"The weakening of foreign orders is the biggest uncertainty in the Chinese economy, and the impact of this trend on China's export sector might not have manifested fully," analysts from the Bank of Communications said in a report the bank sent to the Global Times. 

Bai predicted that China's exports would take a turn for the better in the second half of this year, as the pandemic wanes and demand warms up in Europe and the US, but orders would still be restrained in June.