(Adds analysts' comments on July imports and forecasts for soybean and other
oilseed products and grains.)


  BEIJING (Dow Jones)--China's agricultural products imports in July rose
sharply from the same month last year due to high local prices and ample cash
liquidity, said analysts Monday.

  Rising global prices may help to reduce imports somewhat in coming months,
however, as local demand remain sluggish, they said.

  China imported 4.39 million metric tons of soybean in July, up 25% from a
year earlier, while soyoil and palm oil imports rose 61% and 37%, respectively.

  Wheat imports also surged to 85,078 tons from only 373 tons.

  "The higher (imports) were completely driven up by liquidity rather than
demand," Xinhu Futures analyst Shi Yan said, adding that flush liquidity was
also the main cause of a recent round of price increases.

  Easy monetary policies designed to pull China through the financial crisis
have raised cash liquidity, fuelling increases in prices from commodity futures
to equities.

  Benchmark soybean futures contracts traded on the Dalian Commodity Exchange
have risen almost 20% since late April, while soyoil futures are up 16%.

  Policies supporting prices of major agricultural products from soybean to
corn and wheat have also helped to keep imports relatively attractive.

  The number of price inquiries for wheat have increased due to low global
prices, and imports are likely to stay high in coming months, said a local
analyst who declined to be named. China didn't import any wheat in
August-November last year.

   Agricultural Products Imports May Moderate In 2H


  The artificial demand driven by cash liquidity and price supports is expected
to push global prices higher, however, so the country's commodities imports are
unlikely to be as robust for the rest of the year as they were in the first
half, analysts said.

  Commodities imports are likely to moderate in the second half as the boost
from restocking, arbitrage opportunities and easy credit policies starts to
fade, Royal Bank of Scotland said in a report issued last week.

  New yuan loans fell sharply to CNY355.9 billion in July from CNY1.53 trillion
in June.

  People's Bank of China Vice Governor Su Ning said earlier this month that
loan growth is likely to slow in the second half, partly because banks often
concentrate on getting loans out earlier in the year, and government-backed
investment projects are likely to taper off.

  The central bank recently warned that it could fine-tune its moderately loose
monetary policy. The warning weighed heavily on sentiment in local markets
recently due to concern that cash liquidity could tighten.

  Xinhu's Shi expects soyoil imports this month to be around 300,000 tons,
while palm oil imports could be around 550,000 tons, both sharply higher on
year but down from a combined 943,472 tons in July.

  Soybean imports this month are expected to fall to slightly more than 2
million tons from 3.83 million tons in August 2008 due to ample domestic supply
and higher global prices. The Ministry of Commerce said in its latest report
that it expects imports in August to be 2.39 million tons, based on importers'
cargo reports.


  -Zheng Xiaolu contributed to this story, Dow Jones Newswires; 8610 6588-5848;
tracy.zheng@dowjones.com