China’s soybean imports fell in August from the same month a year ago, customs data showed on Tuesday, as low crushing margins and high international bean prices weighed on demand.

China, the world’s top buyer of soybeans, brought in 9.49 million tonnes of the oilseed in August, slightly down from 9.6 million tonnes a year ago, data from the General Administration of Customs showed.

Crushers ramped up purchases of soybeans in the early months of the year on expectation of strong demand from a fast recovering pig herd. Shipments slowed more recently, however, as falling hog prices pushed down demand.

August imports were up 9.5% from 8.67 million tonnes in July, according to the data.

Soybean crush margins in China have climbed from record low levels in June but still remain under pressure due to flat demand and the high cost of imports.

Chinese crushers bring in soybeans to crush into soymeal to feed the massive livestock sector and provide cooking oil.

Crushers in Rizhao, Shandong province, a major soybean processing hub in northern China would lose about 80 yuan ($12.40) for each tonne of soybean processed as of Monday.

China’s hog margins have plummeted since the start of the year and stayed at low levels on tumbling pork prices. Margins in Sichuan, a top producer in China, were at negative 200 yuan.

Chicago Board of Trade soybeans prices, on the other hand, have risen more than 30% from the previous year.

Demand for soymeal usually picks up in late August and September as farmers fatten pigs to prepare for upcoming festivals and winter.

However, soybean shipments in the next few months are not expected to spike as China built up ample supplies earlier in the year, while hog margins should remain low, traders said.

Source: Reuters