* China soybean crushers losing money on processing
* Losses plunge to worst in nearly three years
* Want to delay or cancel soybean imports -sources
* Soybean imports expected to decline in third quarter
By Naveen Thukral and Dominique Patton
SINGAPORE/BEIJING, May 31 China's soybean
importers are pushing to postpone or cancel cargoes mainly
ordered from suppliers in Brazil as they rack up hefty losses
processing the commodity into cooking oil and animal feed
ingredients, said three trade sources.
China, which buys around 60 percent of soybeans traded
worldwide, took advantage of strong crushing profits at the
beginning of the year and lower prices following bumper harvests
in Brazil to aggressively buy the oilseed.
But those profits have swung to the biggest losses in nearly
three years after China's edible oil markets were flooded with
rapeseed oil auctioned from national reserves and by growing
imports of other alternative vegetable oils.
"Several importers are trying to delay shipments, even the
big companies are asking shippers to delay," said a soybean
trader, declining to be identified as he was not authorised to
speak with media.
Soybean crushers in Shandong province, a key production hub
in the country's east, were this week losing 292 yuan ($43) on
each tonne of soybeans processed JCI-SBMG-SHDNI, the worst
since September 2014.
"Some are even trying to washout cargoes but it is unlikely
to be widespread," the trader continued, using the industry term
for cancelling cargoes with the seller's consent.
"It is very difficult to get the exact number on
cancellations, but I think it will not be more than five to
seven panamax cargoes."
Each panamax-sized vessel carries about 60,000 tonnes of
soybeans, representing processing losses of about $2.58 million
if crushed in Shandong.
Consultancy Shanghai JC Intelligence said last week that
four to five cargoes for May and June loading were cancelled,
with another two or three resold to neighbouring countries.
"Many importers are keen to washout cargoes, but they will
not able to do that as everyone is heavily booked," said a
Singapore-based trader at an international trading company with
soybean processing facilities in China.
Chinese bean imports stood at 8.02 million tonnes in April,
a record for the month, customs data showed. That marked the
fourth straight time imports had set records for their
Imports in May and June will likely to hit around 9 to 9.5
million tonnes as previously booked cargoes arrive, sources
"The industry is suffering a lot, especially the smaller
players," said the Singapore-based trader.
"We have had big arrivals and this will continue until at
least June or July, shipments will decline after that."
In July, soybean cargo arrivals at Chinese ports are
expected to drop to about 8 million tonnes with further declines
seen in the rest of the third quarter.
($1 = 6.8365 Chinese yuan renminbi)
(Reporting by Naveen Thukral in Singapore and Dominique Patton
in Beijing; Editing by Joseph Radford)