Weak Chicago soya futures are putting pressure on international suppliers to cut prices for South American cargoes, which have been awaiting payment for months.
With Chicago soya futures at eight-month lows, traders said on Friday international suppliers feared further losses if they failed to find a home quickly for the cargoes.
They had also heard of some fresh soya deals by small Chinese crushers the first in months despite big international suppliers' determination not to sell soyabeans to China until open contracts on about 20 cargoes were sorted.
"It (weak Chicago futures) makes suppliers of the boats sitting there more and more nervous," said a trader at an international house. "It will force the suppliers to accept proposals made by the buyers to reduce the prices."
Traders said it was unlikely international suppliers would recover losses from Chinese buyers, who had failed to pay contracted prices of $400 to $430 a tonne, C&F, despite arbitration's.
NEW DEALS: They said two or three fresh deals were done at about $320 a tonne, C&F, for August and September shipment from South America between small Chinese crushers and minor suppliers.
"We can confirm two," said a trader in Shanghai. "They bought from very small suppliers big suppliers like us, we are not willing to sell anything."
For some of the cargoes, which had been waiting in the water for weeks, the international suppliers were reluctantly accepting requests by Chinese buyers to defer part of payment, they said.
They were also selling part of the cargoes to new buyers in China at current market prices of about $300 as their initial buyers had failed to pay following months of negative credit margins and credit tightening by Beijing, traders said.
The traders said combined losses would reach hundreds of millions of dollars. Besides price differences of about $100 a tonne or more, suppliers faced demurrage costs of $1 million a vessel per month.
There would also be extra charges if the destination changed. Big suppliers were expected to review trading terms with Chinese crushers that had defaulted on contracts. "Everyone is still licking their wounds.
They will be very cautious in future very choosy in whom they will deal with, a lot of guarantees etc," said a trader in Singapore. "You know it is going to cost $300-$400 million to the trade."
The first trader added: "The next six to 12 months, the world's soya prices are going to be weak. Soya margins in China are going to be really nice. Who's going to make money?"
"It is going to be those that can buy beans at normal terms."
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