China slows soymeal exports on GMO worries
Date: 12-Sep-02
Country: CHINA
Author: Nao Nakanishi
"Now the activity is quite slow," said a trader in Shanghai, referring to Chinese soybean meal exports.
"Crushers here are not very comfortable with the future (soybean) supply...They are building stocks." With Chinese domestic soybean meal prices as high as 2,350 yuan per tonne ($276) in the consuming south, soybeans are being offered at around $220 per tonne FOB China, the traders said.
The prices compared with Indian meal seen at around $190 per tonne FOB for November shipment, or Argentine soybean meal at around $220-$225 C&F for most parts of Asia, they said.
Many people in the industry in China fear soy imports could grind to a halt on December 20, when an interim agreement with Washington on gene-altered crops expires. Under that accord, China agreed to accept U.S. certification that GM crops were safe for humans and livestock.
Processors from China, the top importer of U.S. soybeans with purchases of $1 billion last year, had been buying large amounts of soybeans recently for delivery before December 20.
So far, Beijing has remained silent on whether the agreement with the U.S. will be extended or whether a new set of rules will apply to GM crops.
SOME DOUBTS ON SMALLER INDIA EXPORTS
Still, some traders said Japan may be forced to focus more on China in view of a possible decline in Indian supply.
Massive soy cargoes are expected to arrive in China from South America as well as the United States before December 20, in addition to large amounts of soybean oil, they said.
The country has also begun harvesting what is expected to be a record soy crop of 16.5 million to 17 million tonnes.
If imports start to depress soybean prices in China, crushers may try again to push out soybean meal to neighbouring countries, including Japan, South Korea, Malaysia, Indonesia or Vietnam.
"I am bearish on domestic products," said a third trader based in Beijing. "If prices collapse, some of the people will try to export."
While China is no longer interested in booking more U.S. soy cargoes, the traders estimated 1.2 million to 1.5 million tonnes of soy arrived in August. They expected another 1.0-1.2 million tonnes in September, one million tonnes in October. They also estimated 2.1 million to 2.2 million tonnes were to reach China between November and December 20.