HONG KONG (June 10 2003) : China has bought large quantities of soyaoildue to high domestic vegetable oils prices while a few soyabean cargoesare stranded at ports amid worries Beijing is trying to curb bean imports,traders said on Monday.
They said the deals to buy up to 170,000-180,000 tonnes of South Americansoyaoil were sealed at between $ 514 and $ 525 per tonne, C&F, forshipment between June and September, mostly July.
Some said the latest Chicago rally, which pushed up soyaoil prices to $535-$ 545, per tonne, C&F, had prompted some buyers to wash out - or sellback the cargoes to the suppliers at a fee - possibly as much as 20,000 to30,000 tonnes.
"It's all because of bullish rapeseed prices in the domestic market.Farmers are reluctant to sell rapeseed," said a trader in Shanghai. "Therewere rains, which delayed the harvest. Now farmers are hoping to getbetter prices."
Still, the traders estimated the 2003 output of rapeseed - which containsmore oil than soyabeans - to reach 11.5-11.8 million tonnes or more,against 10.53 million last year, despite earlier worries over damages fromrains.
Domestic vegetable oils prices were also supported by quarantineauthorities, known as CIQ, who have been slow in giving import permits forsoyabeans, even for cargoes that have already arrived in China, they said.
The traders said while one or two cargoes were now discharging soyabeansafter delays, two to three vessels were still at the ports waiting forimport permits.
At least another seven or eight cargoes were sailing to China from SouthAmerica. One is expected to reach China by the end of this week.
"It is a matter of time. They will issue the permits eventually," saidanother trader in Shanghai. "But it was time (for the government) to takemeasure to slow down soya imports."
The traders agreed Beijing was eager to put a brake on soyabean importsthat had been heading towards a staggering 20 million tonnes in this cropyear, up from 10.38 million the previous year.
"The government wants to allow only 15 million," the first trader said."What the CIQ wants is that Chinese receivers to wash out some cargoes."
Some traders said they had seen buyers negotiating to sell back the soyacargoes to the suppliers, or other buyers who were more confident inacquiring import permits. Interests for fresh deals for July shipment hadevaporated.
The trades said high vegetable oils prices had also led to a deal to buy20,000-30,000 tonnes of rapeseed oil from Canada for November shipment atprices around $ 555-$ 557 per tonne, C&F.-Reuters