* China’s soybean market seen slower over next 1-2 years
* China’s austerity drive seen weighing on its soybean demand (Adds quotes, details)
By Rujun Shen
SINGAPORE, Feb 13 (Reuters) - China’s soybean crush margins are expected to stay positive from now on due to the recent drop in imports, said the chief executive of one of the world’s top buyers of the oilseed, Wilmar International Ltd.
China’s overseas purchases of soybeans have dropped to “much more normal” levels, Kuok Khoon Hong said on Friday, adding that margins would, however, be determined by market volatility.
The country, which buys more than 60 percent of the oilseed traded worldwide, imported 6.88 million tonnes of soybeans in January, down from record high arrivals of 8.53 million tonnes in December, customs data shows.
China’s soybean processing margins CNSOY-RZO-MRG have been mostly positive this year after a sharp drop in December.
The country will make a seasonal shift to import cheaper Brazilian soybeans in the coming months after shipping mainly U.S. cargoes since the last quarter.
Brazil and Argentina are on track for a record production, following an all-time high output in the United States last year, which is expected to keep a lid on prices.
Argentina will produce a record 58 million tonnes of soybeans in the 2014-15 season, the Rosario Grains Exchange said on Wednesday, citing recent rains as a key factor increasing its previous estimate of 54.5 million tonnes.
Brazil is estimated to produce 94.5 million tonnes of soybeans this year, up from 86.7 million tonnes a year ago, according to the U.S. Department of Agriculture.
Wilmar’s chief executive also said that China’s soybean demand will slow down in the next year or two due to the austerity drive in the country.
“Consumption of meal (soymeal) has slowed down, because of this austerity drive. I think the rate of growth in the next one or two years will be slower than last few years,” Kuok said.
Wilmar is one of the top soybean suppliers to China.
Wilmar, also the world’s largest palm oil processor, said on Thursday that its net profit for the last quarter of 2014 climbed 8.7 percent, helped by strong performance in most key segments such as palm oil and sugar. (Writing by Naveen Thukral; Editing by Himani Sarkar)