China full of beans, GMO rules not an imminent worry
Date: 27-Sep-02
Country: CHINA
Author: Nao Nakanishi
They said the country was swamped with soybeans, with the domestic harvest underway and 2.2-2.5 million tonnes of U.S. soybeans due to arrive before December 20.
"It's not possible to do more because we have local supply now and product prices in China are very weak," said a trader at a major international house in Beijing.
"People do not need to front-load any more. Buyers think they still have time. Probably there won't be any deadline."
The interim rules on importing GM crops were designed to restore the flow of Sino-US soybeans trade worth $1 billion last year, which was disrupted by China's controversial and confusing original rules on genetically modified organisms (GMO).
This week, Allen Johnson, chief agriculture negotiator of the U.S. Trade Representative, said he had been assured Beijing would make an announcement on the GMO rules before President Jiang Zemin meets U.S. President George W. Bush on October 25.
An official at the Agriculture Ministry in Beijing declined comment on whether it planned to extend the interim measures.
China's 2002 crop is set to rise to 16.5-17 million tonnes from 15.4 million last year, which traders said was putting pressure on prices. Domestic soy prices were down around 1,900 yuan ($228.92) per tonne in the northeastern provinces, against more than 2,300 in early September.
The prospects of a Chinese announcement has added to the price pressure, narrowing crushing margins, the key for soy imports, they said.
S.AMERICAN NEW CROPS
Traders said China continued to buy new crop South American beans due to be harvested after late March.
More than 30 cargoes have been booked for shipment between April and June at premiums between 40-47 U.S. cents per bushel above the Chicago May contract, they said.
"Just in the last couple of weeks, they booked above 30 cargoes," another trader, based in Shanghai, said.
Helped by the prospects of record crops in Brazil and Argentina, South American beans are priced well below that of the United States, with prompt crop U.S. cargoes offered at premiums around 100 cents above the November contract.
Traders have long said South America is set to expand its share of the Chinese market, with a combined 2002/2003 output by Brazil and Argentina set to exceed that of the United States for the first time.
Some traders said the window left open for U.S. soy might not be large as many crushers were already covered up to January.
Custom data released on Monday showed 1.30 million tonnes of soybeans and 120,396 tonnes of soyoil arrived in China in August.
Traders said they expected another 1.0-1.2 million tonnes of soybeans each month for the rest of the year.
Soyoil imports are likely to total about 800,000 tonnes this year, compared with 207,993 tonnes during the first eight months of this year.
(Additional reporting from Lee Chyen Yee in Shanghai).
