China's soyameal exports have started climbing with up to 80,000 tonnes sold to Japan and Vietnam in the last two weeks, almost double of April shipments, as slow domestic demand prompts processors to look for overseas markets. Soyameal exports from China, the world's biggest importer, will dent sales of traditional suppliers India and Argentina, which are saddled with large stockpiles following bumper harvests.
China is expected to sell more meal cargoes in the coming weeks as processors grapple with an oversupply of beans in the domestic market amid a slow down in consumption, traders said. "It started only a couple of weeks ago as China's domestic demand is not very good, while plants continue to crush beans," said a Singapore-based trading manager with an international firm, which runs crushing plants in China. "It should continue for sometime because the price is attractive and Japanese love buying Chinese meal in smaller cargoes."
China, which buys nearly 60 percent of the world's traded oilseed, has cancelled and deferred cargoes of beans in April on poor crush margins resulting from ample supplies and a slower domestic demand. China's soyameal exports in the first four months of 2011 fell 68 percent to 118,931 tonnes. It sold 40,691 tonnes in April, down almost 57 percent from a year ago, with about 33,000 tonnes shipped to Japan and Vietnam.
Another trader said contracts for around 30,000 tonnes were signed with feed mills in Vietnam for prompt shipment, while the balance is headed to Japan for arrival between June and August. Chinese meal was sold between $430 and $435 a tonne, including cost and freight, to Vietnam and Japanese millers paid around $445 a tonne. This compares to Indian meal being offered at $445 to Vietnam and $455 to Japan. "There is supply push in China. Indian prices are much higher and monsoon is likely to slow exports," said another Singapore trader. "Given the situation in India and China, it makes sense for China to export."
Traders said Japanese animal feed manufacturers prefer cargoes from China which are shipped in smaller boats of 2,000 to 3,000 tonnes. Meal from India and Argentina is mainly shipped in bulk cargoes. Argentina, the world's biggest soyameal and soyaoil exporter, is likely to be hit by China's meal exports. The South American country produced a bumper crop of around 49.5 million tonnes in 2010/11 on top of 54.5 million tonnes last year.
India's soyameal exports are also expected to be hurt, leaving the nation with large reserves at the time of harvest in September and October. "It is not a good situation for India as they have enough stocks but there is not much demand," he said. "There are large volumes lying at Kandla port."
India is Asia's traditional supplier of soyameal, selling three to four million tonnes annually to Thailand, Malaysia, Indonesia, Vietnam, Japan and South Korea. The benchmark Chicago Board of Trade soyameal has risen around 3 percent this week to highest in two months following delays in soyabean plantings in the US, the world's biggest soyabean exporter. Relentless rain throughout the US corn belt this spring, particularly in eastern areas, delayed seeding of corn by more than a month in some locations. There are fears that soyabean crop would also get delayed if the wet weather continues.
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