June 30, 2004

 

 

Brazil - China Soy Trade Returns To Normal

 

Brazilian soybean export business to China has returned to normal with shipments flowing out of ports, said Agriculture Minister Roberto Rodrigues Tuesday.

 

"The ships have been leaving normally since Thursday, when the decision to lift the embargo was published," he said.

 

The information was confirmed by traders, who noted a number of soybean ships were in transit to China.

 

However, trading companies were still negotiating who would shoulder losses incurred due to unloading delays in China, and no new business had been reported, they added.

 

"We are still awaiting the pleasure of more business from China. At the moment, it is just negotiating losses," said a senior trader at one multinational exporting house.

 

On Tuesday, traders in Chicago reported rumors that China had booked two cargoes of South American soybeans.

 

Soybean trade between Brazil and China was paralyzed beginning in late April after the Asian giant rejected cargoes and barred 23 suppliers from the South American country, due to contamination from fungicide-tainted seeds.

 

However, traders said China's ban was really an attempt by local crushers to stem losses and default on deals for Brazilian soybeans, which were bought during recent price peaks.

 

Last week, China agreed to lift a ban on the suppliers, which include firms such as Cargill and Archer Daniels Midland.

 

China is Brazil's main soybean buyer and the South American country's third-largest trading partner in 2003.

 

The ban on soybean exports to China caused discounts on Brazilian shipments to explode since April. Last week, Brazilian exports out of Paranagua port, the main grains outlet, were being quoted as much as $2.00 per bushel below the Jly soybean futures contract on the Chicago Board of Trade, a record for local exports. The July discount tightened by around 20 points Monday on the news.