July 27, 2007

China may cancel or delay more soy shipments 

China has delayed or sold back at least six soy shipments for July and August shipment and may have to delay new cargoes for September, grain sources said on Thursday (July 27).

That could mean Chinese soy imports could slow down drastically to under 3 percent this year, compared to the 10 to 15 percent pace for the last decade.

China's soy imports for August and September is estimated to be about 2 million tonnes each. If so, it meant total imports for the year ending September would be 29 million tonnes, up less than 3 percent from the previous year.

One buyer had delayed five to six cargoes, a trader noted. As many as 10 cargoes may have been delayed or cancelled.

High prices at CBOT further squeezed profit margins for soy crushers and dampened demand in the slowing market.

Domestic soymeal prices have been depressed by weak demand due to deaths from pig disease and farmers' reluctance to enter into pig farming.

Soyoil imports have also been rising in recent months, meaning less need for soy imports from the nation's soy crushers, further stifling demand.

Restocking of the pig population is taking longer time than expected, as there are not enough piglets, an industry source said, adding that the pig population is unlikey to recover until the second half of next year.

Feed officials said pig diseases has killed far more than the 1 million pigs estimated by government authorities since the outbreak was first reported in May last year.