Soybean imports are arriving in China in volumes that exceed traders' and processors' capacity to discharge and store them, causing serious congestion at Chinese ports. That news came in a recent report specially prepared for the Iowa Soybean Association by Promar, a consulting firm specializing in information regarding international food and agribusiness markets.
According to the China National Grain and Oils Information Center (CNGOIC), the congestion began in early June when ports in Shandong started seeing shipments back up. But the problem has since spread to ports in Qingdao and Rizhao, where there are a total of 17 shipments - or as much as 1.2 million tons (44.09 million bu.) - currently waiting to be claimed. There are also reports of additional shipments being held up in Dalian and Nantong, though the number has not been confirmed.
Promar says there are two factors behind the congestion. One is that it is becoming apparent processors overestimated demand, leading them to purchase more soybeans than they actually needed. The other is that, with crushing margins deteriorating due to soft soyoil and meal markets, there is little motivation among processors to claim incoming shipments.
Meanwhile, Promar reports, there are indications of a slowdown in imports ahead. May soybean imports, while up 24% year - on - year, came in 16% below forecasts, totaling 4.37 million tons (166.55 million bushels). In June, importers cancelled between 5 to 8 shipments and postponed to August another 5 to 7 shipments initially ordered for June or July delivery. Moreover, it is estimated that by the end of June soybean stocks at ports could increase to 5.5 million tons (202.07 million bu.), which would set a new record.
Responding to the report, Iowa Soybean Association director of market development Grant Kimberley says, "This particular issue should sort itself out in the next few months because China's demand for soy continues to grow and will be a great long - term growth market for Iowa and U.S. soybeans."
China is the U.S. soybean producers' largest foreign customer. In 2009, the Chinese purchased 23% of the total U.S. soybean production.