New Delhi — China is expected to receive only 105 cargoes totaling 6.9 million mt of soybeans in April, as concerns grow among local crushers for getting shipments from South American ports due to logistical issues, Beijing-based Cofeed told S&P Global Platts.
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Register NowIn April 2019, China imported about 7.6 million mt of soybeans, according to customs data.
At present, ports in South America and the US are operating but the authorities in those regions have taken a series of measures to control the coronavirus pandemic, which has resulted in delays, Cofeed said.
It is now taking longer to transport and load due to quarantine measures employed by authorities for port operations. Some ports in Brazil are working with a reduced staff, according to sources.
Three soybean cargoes heading to China were delayed in March, with the delivery spilling over to April, data from Cofeed shows.
Total nominated soymeal vessels in lineups at Argentinian ports remain at 1.7 million mt for April, but it will be a challenge to fulfill those commitments, an Argentina-based source said.
Traders in Argentina currently are not involved in big commitments to China, with most of the soybean sales to be shipped in May, the source added.
Concerns for ECSA supply
Chinese soybean crushers remain concerned about the deliveries and shipments of South American soybeans in upcoming weeks, as many crushers in March had to suspend their operations because of soybean shortage, Cofeed said.
To avoid delays due to South American soybean exports being affected by the pandemic measures, Chinese buyers have already started purchasing US soybeans, although not in huge quantities.
China has bought 6-8 cargoes of soybeans (shipment for April-May) over the past two weeks from US PNW traders, Cofeed said.
Low stocks of imported soybeans at mills in coastal regions of China also have added to concerns of local crushers.
As of March 27, soybean inventories at China's crushing plants in coastal areas were seen at 2.5 million mt, down 29.4% from the same period last year and the lowest since late November 2013, Cofeed said.
If soybean shortages persist, many crushing operations may come to halt under this situation, Cofeed added.
May and June shipments
The tight measures to control coronavirus in China appear to have worked, resulting in normal domestic logistics operations and soybean transportation, Cofeed said.
Crushing margins have recently returned to a healthy level in China, according to sources.
China will continue its purchase of soybeans amid considerable crushing margins of South American soybeans, Cofeed said.
According to initial estimates, imported soybean arrivals for May is at 8.9 million mt, while combined arrivals estimated for whole June and early July are at 18 million mt, Cofeed said.
On April 3, the SOYBEX CFR China was seen at $360.27/mt, while SOYBEX FOB Santos was pegged at $336.68/mt, and SOYBEX FOB New Orleans at $342.18/mt, according to S&P Global Platts data.