6/23/2004 Agra Europe - China's highly-stretched agriculture sector cannotkeep up with expanding domestic demand for oilseeds and products or grainsand the country will have to continue high imports, Hamburg-basednewsletter Oil World said on Tuesday.

"In our assessment more than 70% of Chinese soybean crush requirementswill have to be imported in 2004/05," it said.

The newsletter was commenting on recent news of Chinese buyers rejectingsoybean cargos on the grounds that they were contaminated.

Confusion over reject cargo

Oil World said Chinese quarantine authorities had recently rejectedsoybean shipments with a fungicide contamination of 0.06%, which is wellbelow the international standard of a maximum 0.2% contamination.

"This has created a high degree of uncertainty and confusion in SouthAmerica as well as on the world market and it has contributed to the priceweakness, primarily in the second half of May 2004," the newsletter said.