Brazil port delays force Chinese crushers to seek US soybeans: trade

China’s major soybean crushers have been forced to turn to the US for near-term bean shipments amid fears that slow loading at Brazilian ports could create a supply gap in the future, five China-based trade sources told Agricensus Tuesday.

Large-size Chinese crushers are considering US soybeans out of the Pacific Northwest (PNW) as an alternative supply for delayed shipments scheduled for late February and early March. 

“If congestion at Brazilian ports is worse and ships cannot discharge, we would consider PNW,” one source at a major Chinese private crusher told Agricensus.

As many as 19 ships are currently waiting at terminals within Brazil’s Santos port while 22 ships are expected to dock in the days ahead, according to the latest data from Santos Port Authority.

The port was also hit by a one-day strike by truckers on Monday, potentially adding to the recent weather-related delays in the port. 

Meanwhile, 15 ships are also queueing at the port of Paranagua, according to Paranagua port administration.

Heavy rain in recent weeks has postponed loading of soybeans at Brazilian ports – notably Santos and Paranagua – causing delay for arrivals into China.

One major crusher in China has already responded quickly by booking two cargoes of February and March shipments out of the PNW last week, as they looked to cover near-term open demand with quick shipments.

While this week, one PNW cargo was rumoured to have traded on Monday, but further details could not be confirmed by time of press.

Shipments from US PNW normally take 25 days, whereas those from Brazil would take 45 days.

However, logistical disruptions in the US Midwest because of wintry means that the earliest shipment out of PNW would be early March.

“Big snow, and farmers [are] not selling,” one trader at an international trading house said, citing the current logistical problems related to the transport of soybeans to the PNW port.

“They want February shipments, but not many [exporters] can load in February,” another soybean trader at another major trading house said, adding that they are able to offer March shipment out of PNW at this point.

In China, logistics also face disruption from the ongoing coronavirus outbreak, which has forced Chinese cities into quarantine and cut off intra-regional transportation, while crush margins for US beans remain uncompetitive.

“The margin is not good. Delivery of soyoil is very problematic and crushers’ operation rate might not keep up,” a third trader said.