The China Customs agricultural trade data for January were broadly weaker after the strength in imports witnessed in the December 2012 data, according to Barclays.

On a m/m basis, only corn and wheat imports were higher.

On a y/y basis the trend was more mixed with cocoa, corn, soybean oil, and wheat imports coming in below year-ago levels. China’s grain imports continued their volatile trajectory. After falling by a third m/m in December (to 265.8Kt), corn imports were firmer in January, at 396.9Kt although down 47% y/y due to the strong buying in 2012.

However, China’s corn exports were sharply weaker, down 77% y/y and at 540 tonnes were at their lowest level since February 2012. This meant China stayed a hefty net corn importer in January, by 396Kt. China’s wheat imports were also stronger in January after having declined sharply in December 2012 (down 95% m/m) and coming in at their weakest level since December 2010.

Imports in January 2013 came in at 179.4Kt; up 3145% m/m although down 16% y/y. Quality concerns over China’s domestic crop had been supporting wheat import demand for much of 2012, with full-year imports in 2012 up by 195% y/y at 3.7mn tonnes. China’s soybean imports pulled back from December’s robust figure of 5.9mn tonnes (the second highest on record) but imports in January were still sizeable at 4.8mn tonnes.

China’s imports of vegetable oils weakened in January. Palm oil imports halved m/m to 472.7Kt while soybean oil imports were also down, by a third, and at 86.9Kt were at their lowest level since May 2012.

After having risen for three consecutive months, China’s cotton imports pulled back in January to 457.4Kt. While imports were lower by 14% m/m, they were up by a solid 40% y/y. Cotton exports remained very low at 70 tonnes. China’s cotton imports in 2012 totalled 5.1mn tonnes and were up by a hefty 53% y/y owing to large imports in the February-May period, during which imports averaged 562.5Kt as China’s stock-building exercise to support domestic prices and farmer incomes mopped up domestic production and led to high domestic prices, with textile mills resorting to less expensive imports.

While China currently holds a significant stockpile of cotton currently, auctions from these state stock reserves have not met with much success with Chinese textile mills showing a preference for importing cotton due to quality concerns.

Across soft commodities, China’s sugar imports pulled back in January after having risen in December. Gross sugar imports came in at 243Kt, down 9% m/m but up 71% y/y. Exports were modestly higher on the month at 4.4Kt which meant net imports came in at 239Kt.

China’s 2012 sugar imports totalled 3.7mn tonnes and were up 28% y/y while exports at 47Kt were down by 21% y/y. Cocoa imports were modestly lower (-3.8% m/m and -4.6% y/y), coming in at 4.1Kt in January from 4.3Kt in December which was the highest level of cocoa imports since May 2012.

Finally, China’s coffee imports pulled back markedly from the previous month’s surge. January 2013 imports came in at 4.8Kt compared to 15.1Kt in the previous month which was a record high.

Exports were modestly lower at 5Kt (compared to 5.7Kt in the previous month) which meant China was a modest net coffee exporter by 126 tonnes compared to net imports that averaged 4.3Kt in Q4 12

Source: Barclays