Posts tagged ‘Soybean’

08/10/2016

How India’s Taste for Soy Oil Has Fueled a Surge in Imports – India Real Time – WSJ

Indians are acquiring a strong taste for soybean oil thanks to lower prices, fueling a surge in imports at a helpful time for a global market struggling with a glut of the commodity.

India’s imports of soybean oil have quadrupled in the last five years to more than 4 million metric tons this year, according to data compiled by the country’s vegetable oils industry body. India’s soybean oil imports are expected to rise over the next 10 years by as much as 40%, the U.S. Department of Agriculture estimated in May.

Soybean oil, produced by crushing soybeans, is used in everything from cooking oil to cookies and lipstick.

In India, they are favored for cooking samosas, dosas and curries, but the relatively high price of soy oil was a deterrent for many consumers in the country. India’s gross domestic product per capita grew 6.9% from a year earlier to $6,200 in 2015, but remained much lower than the U.S. with GDP per capita of $55,800, according to U.S. estimates.

India dethroned China two years ago as the world’s largest importer of soy oil. Some Indian consumers who have switched to soy oil cited the steep drop in prices—35% since 2012. Prices of palm oil, its main rival used widely in restaurants and by poorer Indians, have mostly been moving sideways.

“Demand from India will certainly play a role in absorbing excess soy-oil supplies,” said Vamsi Krishna Kona, a trader at Inditrade Derivatives & Commodities.

Source: How India’s Taste for Soy Oil Has Fueled a Surge in Imports – India Real Time – WSJ

Advertisements
15/04/2014

China in numbers: beans means trouble as commodity markets highlight rising credit risks | The Times

500,000 . . . is the total tonnage of soya bean cargoes on which Chinese importers have defaulted recently, unsettling markets already nervous about the world’s second biggest economy.

Soya bean meal is unloaded at Fangchenggang

Those defaults look alarming. Commodity markets can provide livid symptoms of an economic malaise and the numbers seem to offer evidence of rising credit risk in China. The country’s first corporate bond default earlier in the year merely sharpened sensitiv-ity to any sign of contagion.

Shipping industry sources in Singapore and Tokyo believe that there are six soya bean cargoes at Chinese ports that cannot be unloaded and the same number still at sea. Their total value is somewhere around £180 million, which makes this China’s highest-stakes soya bean default since 2004. This in a country that imports nearly two thirds of all the soya beans traded worldwide.

Explanations are focused on China’s tightening credit markets and the inability of soya bean buyers to secure the necessary letters of credit from banks. It does not take much of a leap to wonder what that type of credit contraction is having on an economy that has been fuelled lately by an epic creation of new credit.

As with other vulnerable sectors in China, the companies that process soya beans have been making losses: suddenly the banks are unprepared to take risks on them and the cargoes have been stranded.

The defaults have highlighted other market distortions that go far beyond the inability of an oilseed processor to turn a profit from a hill of beans. Trading companies have routinely used soya bean cargoes, in common with shipments of copper and other commodities, as collateral to secure cheap financing for potentially more lucrative deals and businesses. Because the interest payable on letters of credit is low and the payment terms generous, some have sold the product itself at a loss simply to get their hands on the cash.

The reality of these defaults, though, is that they are probably a good thing — or at least part of a well-intentioned plan. Beijing has been uncharacteristically relaxed about these defaults for the same reason that it has been uncharacteristically relaxed about internet giants such as Alibaba infuriating the banks by introducing innovative financial products. Beijing knows it has to reform the financial sector, realises that it will face huge resistance and is looking for leverage. Creating a series of micro crises forces China’s banks to become better at what they are supposed to do. Defaults (on soya beans and bonds) have been noisily paraded in state media to show the banks that they are expected to start pricing risk accurately and coldly.

via China in numbers: beans means trouble as commodity markets highlight rising credit risks | The Times.

Enhanced by Zemanta
22/09/2013

Ukraine to become China’s largest overseas farmer in 3m hectare deal

SCMP: “China will plough billions of yuan into farmland in Ukraine that will eventually become its biggest overseas agricultural project.

56ae1c6d0b08a1a698a35974e2f5d6ac.jpg

The move is a significant step in China’s recent efforts to encourage domestic companies to farm overseas as China’s food demand grows in pace with urbanisation.

Under the 50-year plan, Ukraine will initially provide China with at least 100,000 hectares – an area almost the size of Hong Kong – of high-quality farmland in the eastern Dnipropetrovsk region, mainly for growing crops and raising pigs.

The produce will be sold to two Chinese state-owned grain conglomerates at preferential prices. The project will eventually expand to three million hectares.

Ding Li, a senior researcher in agriculture at Anbound Consulting in Beijing, said the deal was a big move for China compared with earlier overseas agriculture.

In April 2009, China had slightly over two million hectares of farmland abroad, he said. “So three million hectares would mean a very big project.”

The agreement was signed in June between the Xinjiang Production and Construction Corps and KSG Agro, Ukraine’s leading agricultural company, XPCC said in a statement.

XPCC, also known as Bingtuan, is a quasi-military organisation established in Xinjiang in the 1950s to reclaim farmland and consolidate defences against the Soviet Union, whose “granary” at that time was, ironically, the Ukraine.

The statement did not reveal the value of the investment, but the Kyiv Post reported last month that it would be more than US$2.6 billion. The newspaper called it an “unprecedented foreign investment” in Ukraine’s agriculture sector.

This would make it China’s biggest reported lease or purchase of farmland overseas. The Beidahuang Group, China’s largest agribusiness, based in Heilongjiang province, and the Chongqing Grain Group have made similar moves to expand abroad.

The farming project was an important part of China’s food security programme and a response to the central government’s strategy of outsourcing the production of food to farms overseas, the statement said.

It would also help the XPCC expand, and provide jobs abroad for Chinese labourers and boost their incomes, it said.

China has made substantial agricultural investments elsewhere, notably in South America. Beidahuang acquired 234,000 hectares to grow soya bean and corn in Argentina, while Chongqing Grain paid US$375 million for soya bean plantations in Brazil and US$1.2 billion for land in Argentina to grow soya beans, corn and cotton.”

via Ukraine to become China’s largest overseas farmer in 3m hectare deal | South China Morning Post.

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India