Charts of the Day: China’s Record-Shattering Soybean and Oil Imports

China’s monthly soybean and crude oil imports both busted single-month records in June, customs data (link in Chinese) showed Tuesday.

The monthly import figures have been closely watched for signs of whether China is meeting its promise to the U.S. to buy more American agriculture and energy goods as part of their phase one trade deal.

The world’s largest soybean consumer imported nearly 11.2 million tons of the oilseed last month, up 71.3% year-on-year and marking the highest monthly volume since the data series began in 1999, according to the General Administration of Customs. The previous record high was 10.1 million tons in July 2017.

China’s imports of crude oil leapt 34.4% year-on-year to 53.2 million tons in June, marking the highest monthly volume in available data going back to 1993. The figure was 5.2 million tons more than the previous record, which was set in May.

While the specific breakdown of imports by product and country hasn’t been released yet, multiple economists attributed the jump in soybean imports to China accelerating its agricultural purchases from the U.S.

In January, the world’s two largest economies reached a truce in their trade war with the phase one trade agreement, in which China promised to increase its purchases of U.S. goods and services by no less than $200 billion over the following two years from a 2017 baseline, including $32 billion worth of agricultural products.

Rising poultry production and the recovery in China’s hog raising industry are expected to increase demand for feed made from soybean meal during the 2020 to 2021 marketing year, which begins Sept. 1, the U.S. Department of Agriculture said in a report released earlier this month. The department forecast China will import 91 million tons of soybeans during that period.

Meanwhile, the rise in crude oil imports is likely due to “stronger domestic construction activities,” investment bank UBS Group AG said in a note. In June, the total value of all China’s imports in dollar terms rose year-on-year for the first time in 2020 as the country reopened its economy, Li Kuiwen, a spokesman for the General Administration of Customs, said (link in Chinese) on Tuesday.

The recent resumption of work at domestic refineries has led to a rebound in domestic crude oil demand, and a sharp drop in oil prices earlier this year has contributed to the growth in crude oil imports, analysts with securities company China International Capital Corp. Ltd. wrote in a note Tuesday.

Contact editor Michael Bellart (michaelbellart@caixin.com)

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