March 19, 2014
China may cancel soy imports on high stockpiles
Due to the country''s ample stockpiles and slowing demand, China, the world''s biggest soy buyer, probably will cancel or postpone delivery of more cargoes from the US and South America, Oil World said.
China cancelled about 400,000 tonnes of US soy in the two weeks to March 6, and "more cancellations are likely," the Hamburg-based researcher said in an e-mailed report. China also cancelled 500,000 tonnes from South America, mainly from Brazil, and "several other cargoes" may be postponed because of ample supplies at Chinese ports, according to the report.
According to Oil World, China''s intention to slow shipments of soy in the near term is primarily due to the current large stocks. "A significant slowing-down of the on-year growth in Chinese soyimports in the April-June quarter could have a bearish impact on soy prices, unless any new export problems arise in South America."
Soy prices have slumped about 4.5% since reaching a nine-month high on March 7 on the Chicago Board of Trade, in part on concern about slowing Chinese demand. As of March 6, US exporters sold 27.8 million tonnes of soy to China since the marketing year began September 1, including 1.87 million tonnes still waiting to be delivered, USDA data show.
China boosted purchases of US supplies this year as insurance against potential delays in South America, after shipping backlogs occurred last year, Oil World said. Brazil, which is harvesting a record crop, has taken steps to speed up loading at its ports, and the country''s exports have "exceeded expectations," it said. China''s soy imports in March may be about 5.5 million tonnes, bringing purchases in the first quarter to 16.2 million tonnes, 8% less than the prior quarter while still 41% higher than a year earlier.
China''s stockpiles of imported soy at the end of this month will be about 3.5 million tonnes higher than at the same time last year, Oil World said. While the country''s imports may be a record 70.5 million tonnes in the 2013-14 season that ends September 30, 77% of the increase in demand will have already occurred in the first half of the marketing year, it said.