June 18, 2009

Chinese soy buyers have already booked as many as eight cargoes of soy from Argentina and Brazil this week, according to traders on Wednesday (Jun 17), marking the return of the world's largest importer to the market after a slowdown in orders.

 

The eight cargoes, which are due for shipment in August, would involve about 450,000 to 480,000 tonnes of soy supplies. Last August, China imported 3.8 million tonnes.

 

Traders said prices of Argentina's shipments were relatively cheap but they did not indicate the exact number of cargoes from Brazil and Argentina.

 

Buying interest has picked up since last week when three or four cargoes were booked from South America, the traders added.

 

Following the over-booking of cargoes at the end of the US export season amid fears of tight supplies from low output in Argentina, the world's third-largest exporter, Chinese buyers have slowed down their purchases over the past weeks.

 

Meanwhile, China's soy imports are expected to reach about five million tonnes in June after failing to show an expected increase in May. Traders also put July arrivals at more than four million tonnes.

 

On the other hand, traders in soy plants in the northeastern region were anticipating China to release some of its soy reserves as early as July, which could dampen the market.

 

Crushers in Heilongjiang province, the country's largest soy production region, were also expecting China's nod to offer subsidies to soy plants in processing soy from state reserves, as in the case of rapeseed.

 

However, traders said the government has not made any decision on releasing soy supplies from its reserves.