• +923 343206 986
  • Contact@btrams.com
  • Pakistan

China Refuses To Import Soybeans From Brazil Due To Rising Export Prices

CHINA : Some Chinese soybean processors are refusing contracts to buy a batch of soybeans from Brazil, because a sudden jump in export prices in Brazil – the largest supplier of soybeans to China – has made soybean processing unprofitable in terms of profit.

About 10 shipments of soybeans from Brazil have been canceled since last week in a move known as the “washout”. In a washout, the physical delivery of the contract is not made with the consent of the buyer and seller.

The move comes after Chinese soybean processing margins turned negative and Brazil’s export premiums soared due to a drought that reduced the yield of the world’s largest soybean producer.

Harvest prospects in Brazil have deteriorated after several weeks of dry weather; analysts have repeatedly lowered estimates of the harvest, which was originally expected to be a record one. Importers are turning to US soybeans, with US exports picking up at a time of the year normally dominated by shipments from Brazil. Soybean futures on Benchmark Chicago rose to almost an eight-month high.

Chinese processors are currently suffering losses of about $20 per tonne of imported soybeans. Buyers are likely to delay purchasing plans for all overseas shipments.

China, the world’s largest importer of soybeans, is particularly vulnerable to inflationary pressures from skyrocketing oilseed prices. The country has the largest pig industry in the world and is highly dependent on overseas supplies of soy for the processing industry, which produces pig feed meal and cooking oil.

Prices for live pigs have fallen by about half over the past year, prompting Beijing to plan to buy pork to replenish government reserves.

Source : Bloomberg.

Leave a Reply

Your email address will not be published.

en English
X