Soyameal buyers in Vietnam, Indonesia and Thailand are asking their suppliers to either defer or cancel shipments, fearing a drop in demand for commercial feed following an outbreak of the bird flu disease.
Fears among the global grains trade have mounted since China became the 10th Asian nation to be hit by the virus, following outbreaks in Thailand, Indonesia, Vietnam, Japan, South Korea, Cambodia, Pakistan, Taiwan and Laos.
As the virus ravages Asian poultry farms, soya and corn futures at the Chicago Board of Trade (CBOT) have also been hit, with corn falling to two-week lows and soyabean to three-week lows on fears of reduced feed demand from Asia.
"Buyers are asking suppliers, including us, to cancel, defer or wash-out some Indian soyameal shipments," said one leading Singapore-based trader. "We have received requests from Vietnam, Thailand and Indonesia."
A wash-out is the sale of a cargo back to the supplier at a higher price. Traders said they feared other nations hit by bird flu might also seek cancellations.
"We are keeping our fingers crossed. You never know. It's very difficult to estimate feed demand now," one trader said. Feed millers are showing no interest."
In Thailand, the poultry sector accounts for about 55 percent of commercial feed consumption, while it is 35 percent in Vietnam and 80 percent in Indonesia. Poultry feed formulation needs about 20 percent soyameal and at least 50 percent corn.
Indian and US supplies are expected to start slowing from March onwards. Soyameal from new crops in Brazil, the second-biggest soyabean producer, after the United States, and Argentina, the third-biggest, are expected to start flowing from April.
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