Soybean deliveries of about 7 million metric tons are held up at ports in Brazil, poised to be this year’s largest exporter, pushing up prices in China, Wilmar International Ltd. said.
“Everybody is having delays,” Kuok Khoon Hong, chief executive officer of China’s largest supplier of cooking oils, said in an interview today in Singapore, where the company is based. “That’s why prices in China are very strong, because of the bottlenecks. About 7 million tons are waiting.”
Crushers in China, the world’s biggest buyer, boosted purchases from the U.S. this week on concern that a possible strike in Brazil by dock workers will disrupt shipping, researcher Shanghai JC Intelligence Co. said today. Before the stoppage call, Oil World said Feb. 12 that about 100 ships are bottlenecked at ports and are facing wait times up to 50 days to load. Futures in Dalian reached a three-month high and prices in Chicago headed for their best run in 10 months.
“China seems to be buying from the U.S. again, and purchases are being diverted from Brazil because of the port backlogs,” Joyce Liu, an analyst at Phillip Futures Pte, said by phone from Singapore. “U.S. supplies are already tight.”
Brazilian dock workers plan a six-hour stoppage today to protest against a proposed regulation allowing privately owned terminals to hire workers who are not members of OGMO, an organization that manages the workforce at public ports. Buyers in China may have ordered 400,000 tons to 500,000 tons after they returned from last week’s Lunar New Year holiday, said Monica Tu, a soybean analyst at Shanghai JC.
Soybeans on the Dalian Commodity Exchange climbed as much as 2.6 percent to 4,918 yuan ($788) a ton today to the highest level since Nov. 7. The contract for September delivery closed at 4,857 yuan, up 1.3 percent, as trading volume jumped almost four-fold. On the Chicago Board of Trade, futures for delivery in May rose for a fifth straight day, the longest rally for the most-active contract since April 30, and were at $14.9175 a bushel by 5:35 p.m. Singapore time.
The U.S. Department of Agriculture said yesterday the nation’s exporters reported selling 130,450 tons of soybeans, without identifying the importing country. The USDA expects Brazil’s output to reach a record, while increasing demand cuts U.S inventories to a nine-year low.
The harvest in Brazil will surge 26 percent to a record 83.5 million tons this year, surpassing the crop in the drought-hit U.S. and making the South American nation the world’s largest grower and shipper this year, USDA data show.
Brazil may have trouble delivering its record crop as the government implemented regulations on maximum working hours and mandatory breaks for truck drivers, Oil World said in a Feb. 12 report. Truck shortages also may boost transportation costs by as much as 40 percent, it said.