January 21, 2009

China's soy imports have slowed as extreme cold weather in the US hampers grain transport and movement of ships at leading ports, Asian traders said on Tuesday (Jan 20).

They said the harsh weather has affected operations at ports on the US Gulf Coast, causing a delay of more than 2 weeks in soy arrivals for some Chinese buyers.

The country's top grain-producing region, the US Midwest, last week faced mornings of arctic temperatures, threatening its dormant wheat crop and slowing the movement of grain and livestock to terminal markets.

Earlier this month, officials said fog hampered shipping along the central US Gulf Coast, including the big port of Houston. Galveston, Texas City and Beaumont and Port Arthur in Texas and Lake Charles, Louisiana were also affected.

Traders said the slowdown in soy arrivals was likely to continue as deliveries spill over into February.

China's decision to purchase 6 million tonnes of domestic soy for state reserves from farmers at higher prices had also prompted some crushers to boost cheap imports, but crushing plants face a shortage of imported soy now.

Traders expect imports in January to fall slightly, to 3.1 million tonnes, as crushers scale down production during the week-long Lunar New Year holidays.

Besides the US weather, traders in China said stricter inspection of US soy cargoes by the quarantine authorities have added to delays, driving up domestic soymeal prices by 30 percent since December.

China's quarantine bureau last month warned the US over the quality of soy after finding traces of harmful pesticides in one US cargo.