June 12, 2010

 

 

Qingdao Port, the biggest in China's Shandong province, is congested by ships arriving to unload soy, signalling that purchases by China may slow.

 

As many as nine more ships, each carrying about 60,000 tonnes of soy, are scheduled to unload this month, in addition to the two or three that have already been processed, said a source who declined to be identified because the information is not public. Normally, there would be five, he said. As these ships wait for berths at the port in eastern China, cargo owners may have to pay operators US$20,000 a day, he said.

 

The country has cancelled or delayed more than 10 cargoes on concern imports will outpace demand, the China National Grain & Oils Information Centre said. Shipments into Shandong, the country's third-biggest provincial economy, are held up as storage is full, the centre said June 4.

 

"We're faced with an oversupply situation that will need some time to digest," said analyst Tommy Xiao. "Crushers had anticipated better demand so they raced to order more. Now they realise the rate of imports has exceeded demand. The congestion will last at least through July."

 

More than 100,000 tonnes of soy are stored in bags at Qingdao Port and more are expected as traders without crushing capacity seek space to keep their beans, said the person with knowledge of the matter. The situation at nearby Rizhao Port is worse because it has little room to store beans, said the person, who had spoken to officials there.