Soya demand has waned in China, the world's top importer of the oilseed, ahead of the May Day holidays as crushers struggle with large losses due to slack poultry demand in the wake of the bird flu outbreak this year.
Traders said on Friday they were revising downwards their estimates for China's 2004 soya imports, with hardly anyone eager to book fresh cargoes despite falls in prices of South American soyabeans.
Some said they were also worried about Brazil, the world's number two producer, as Chinese quarantine officials had rejected a cargo from there because it was treated with a harmful pesticide.
"China would like to sell beans now. I haven't heard of a single inquiry for the whole of April," said a trader based in China. "I don't think I will hear any for the rest of May either. Demand for meal is very weak."
With domestic soyameal prices falling a further 100 yuan ($12) in the past week to about 3,100 to 3,200 yuan ($374-$386), many crushers were suffering losses of 200 to 300 yuan ($24-$36) a tonne, they said.
Some traders estimated as much as 1.8 million tonnes of soyabeans were now piled up in China, despite an estimated drop in April arrivals to 600,000 to one million tonnes, compared with 1.59 million tonnes in March.
"It (the soyameal price) is weak. I think the impact of bird flu is still there. We have underestimated the impact of bird flu," said a trader based in Shanghai. "Poultry consumption has not come back to normal."
Traders said they were winding down their estimates for Chinese 2004 soya imports from South America to 10 to 12 million tonnes, compared with 12.43 million last years.
"The situation is worse than expected because of weak meal demand and so much oil imports for both soyaoil and palm oil," said a trader in Beijing. "There's also a good projection for domestic repaired."
Traders said they had heard rumours of washouts selling back cargoes to suppliers at a fee but they could not be confirmed.
At least two cargoes had changed buyers within China. Traders said China's 2004 repaired crop was expected to reach about 12 million tonnes, up from 11.5 million last year, unless it rained a lot ahead of the harvest around May 20.
Although quarantine authorities had so far turned away just one cargo from Brazil, traders said up to two million tonnes of South American soyabeans had been shipped to China in April.
The Shanghai trader at an international company said: "It is a big problem. We do worry about Brazilian beans now."
Traders said the cargo had been sprayed to prevent Asian soya rust, which spreads through the air to attack plant leaves and seriously erodes yields. It has posed a big problem in Brazil this year.
Industry managers told Reuters in Brazil on Thursday farmers in Mateo Gross, the country's main soya state, had been spraying fields up to seven times to combat the fungus, compared with four sprayings in a more normal year.
Though domestic vegetable oil prices were stable, there was little upside scope due to huge arrivals of South American soyaoil and palm oil and a good repaired crop expected at home.
"Oil demand is so far fine.
But we have too many arrivals," the Shanghai trader said, adding about 250,000 tonnes of soyaoil had made it to China in April alone.
Customs data showed Chinese soyaoil imports surged more than three-fold to 763,043 tonnes during the first quarter, while palm oil imports were up 11.2 percent at 385,115 tonnes.
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