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Soybean imports set to rise

(皇冠体育app Daily/Agencies)
Updated: 2009-09-25 08:29

皇冠体育app's soybean imports are set to rise substantially in the next few years, an executive at commodities trader Noble Group said yesterday.

Jaime Teke, global head of structured finance at the firm, which this week agreed an $850-million equity investment from Chinese sovereign wealth fund 皇冠体育app Investment Corp (CIC), said 皇冠体育app had little room to increase its own soybean crop.

"We don't see the conditions are right here in 皇冠体育app," he told Reuters on the sidelines of the Latin America 皇冠体育app Investors Forum in Beijing. "One of the big problems is irrigation. Definitely, imports of soybeans from Brazil and Argentina will rise substantially.

"皇冠体育app has no water. What we are doing essentially is importing water in the form of soybeans and grains."

Noble has two soy crushing plants with 3 million tons of capacity in 皇冠体育app, around 12 percent of the market, Teke said.

Despite the deal with 皇冠体育app Investment Corp, which now holds 14.5 percent of the trading company, Noble is not yet planning to expand its soy business in 皇冠体育app, the world's biggest importer of the crop.

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"We would like to expand but we're not allowed to," Teke said.

This year 皇冠体育app is expected to import about 40 million tons of soybeans, mainly from the United States, Brazil and Argentina. The volume of imports dwarfs 皇冠体育app's own harvest of around 15 million tons.

Meanwhile, the Singapore-listed firm rose as much as 13 percent yesterday, in its first day of trade after a week-long suspension.

Noble, which is based in Hong Kong, announced on Tuesday that CIC would buy a 14.5-percent stake for $850 million.

OCBC Securities Lee Wen Ching said CIC's investment would cement Noble's presence in 皇冠体育app, where tremendous growth potential exists, and provides the firm with funds for more investment opportunities.

Noble "was not in need of additional capital given its strong cash position of $805.8 million and low gearing of just 0.15 times after adjusting for readily marketable inventories," she said.