SINGAPORE (Reuters) - China’s soybean imports from the United States are likely to be delayed by at least two weeks as suppliers struggle to find high-quality beans following crop damage from hurricanes, two trade sources with knowledge of the matter said.
Shipment delays could result in tight supplies at the end of October and early November, they warned, driving up soymeal and soyoil prices in the world’s biggest importer of soybeans.
“Exporters are asking Chinese buyers to lower the quality specification, but they are not agreeing,” said one Singapore-based trader at an international trading company with oilseed processing facilities in China. The trader declined to be identified because he is not authorized to speak to the media.
China, which buys about 65 percent of soybeans traded worldwide, has been snapping up U.S. soybean cargoes in recent weeks, taking advantage of a nearly 10 percent decline in prices since mid-July.
But early harvested soybeans, produced near the Mississippi Delta, suffered damage from hurricanes last month, making it difficult for exporters to meet quality specifications agreed with Chinese buyers, the trade sources said.
GRAPHIC: China soybean imports delayed by U.S. quality concerns: reut.rs/2yn8WJt
The poor bean quality is causing delays at U.S. Gulf terminals, with waiting times for ships rising to 10-12 days from the usual five days at this time of the year, the traders said.
Low water levels in the Mississippi river due to dry weather could add to delays in shipping crops as the harvest gathers momentum.
Back-ups at aging locks have slowed navigation on the Mississippi and its tributaries and driven the cost of hauling Midwestern crops to Gulf Coast terminals to near-record highs.
This has left U.S. farmers struggling to find room to store their just-harvested corn and soybeans while grain storage on the river’s banks is filling up.
“Some Chinese buyers are trying to book cargoes from U.S. Pacific Northwest (PNW) ports,” said a trader at a state-owned trading company in China, speaking on condition of anonymity.
“We think this will be a temporary issue - some tightness in supplies toward the end of October and early November. It will support meal and oil values.”
The Pacific Northwest is typically an export hub for wheat, not soybeans.
The trader said China was amply supplied with beans as of now, following record purchases from Brazil in the past few months.
China imported 8.45 million tonnes of soybeans in August, according to customs data, a record for the month, as improving processing margins boosted demand.
GRAPHIC: China soybean imports by month: reut.rs/2j958og
The August import figure was up 10.2 percent from last year’s 7.67 million tonnes, but down 16.2 percent from 10.08 million tonnes in July, according to figures from the General Administration of Customs of China.
Reporting by Naveen Thukral; Editing by Sonali Paul