July 20, 2010

China corn diverts from Dalian port

Domestic corn cargoes are being diverted from the stricken northeast Chinese port of Dalian due to the oil pipeline explosion, the China National Grain and Oils Information Center said on Tuesday (July 20).

Friday's explosion at Dalian has forced the closure of most of the facilities in the Dayaowan area of the port, and traffic to the Beiliang section-which handles grain shipments-has been restricted but not stopped. However, imported soy shipments have not been affected.

The closures at Dalian, one of China's biggest ports, followed a pipeline explosion and fire while oil was being offloaded from a tanker, and state media said some 1,500 tonnes of oil spilled into the sea, causing a 183 sq km (71 sq mile) slick.

Researchers with CNGOIC said the ships, carrying domestically produced corn, were unable to dock at Dalian because of the congestion, and are now being diverted to the nearby ports of Jinzhou and Bayuquan.

Warehouse space is expected to be sufficient to meet demand, but traders are now working frantically to make their deliveries to the rest of the country.

According to data supplied by the China Customs Statistics Information Center in Hong Kong, China sought to head off possible corn shortages in June by importing 64,659 tonnes of corn, more than 23 times higher than the same period of last year,.

Analysts expressed fears that the explosion and subsequent closure of the port could affect China's soy imports, around 10% of which pass through Dalian. However, a CNGOIC researcher said there has been no noticeable impact on the delivery of imported soy to Dalian.

An official with a local soy crushing facility said that cargoes were arriving as normal, but said ships were being asked to pay fees to help cover the cost of the cleanup. The explosion at the Xingang section of the port has caused an oil slick stretching at least 183 square kilometres and over 500 fishing boats have now been recruited to help out with the cleanup operations, said reports on Tuesday (July 20).