According to the China National Grain and Oils Information Center (CNGOIC), the congestion began in early June when ports in Shandong started seeing shipments back up. But the problem has since spread to ports in Qingdao and Rizhao, where there are a total of 17 shipments - or as much as 1.2 million tonnes - currently waiting to be claimed. There are also reports of additional shipments being held up in Dalian and Nantong, though the number has not been confirmed.

 

Promar says there are two factors behind the congestion. One is that it is becoming apparent processors overestimated demand, leading them to purchase more soy than they actually needed. The other is that, with crushing margins deteriorating due to soft soyoil and meal markets, there is little motivation among processors to claim incoming shipments.

 

Meanwhile, Promar reports, there are indications of a slowdown in imports ahead. May soy imports, while up 24% on-year, came in 16% below forecasts, totaling 4.37 million tonnes (166.55 million bushels). In June, importers cancelled between five to eight shipments and postponed to August another five to seven shipments initially ordered for June or July delivery. Moreover, it is estimated that by the end of June soy stocks at ports could increase to 5.5 million tonnes (202.07 million bushels), which would set a new record.

 

Responding to the report, Iowa Soybean Association director of market development Grant Kimberley says, "This particular issue should sort itself out in the next few months because China's demand for soy continues to grow and will be a great long - term growth market for Iowa and US soy."