Many crushers in China, the world's top soya importer, are seeking to cancel or delay shipment of high-priced South American cargoes, threatening contracts for millions of tonnes of the oilseed, traders said on Thursday.
They said many of the crushers had run out of cash following a credit tightening by the government, which is trying to rein in run-away investment in fixed-assets and inflation caused by surging prices for raw materials, including soyabeans.
With Chinese domestic soyameal prices crumbling and Chicago Board of Trade futures receding rapidly from multi-year highs, soya suppliers feared possible defaults on at least 20-30 cargoes in the near future, they said.
Chinese buyers could not afford the high fees required to cancel or delay the cargoes, mostly contracted during a Bull Run in Chicago last year, they said.
The suppliers, on the other hand, would find it tough to find new buyers for so many soya cargoes. Even if they did, they would incur huge losses due to sharp falls in the soya prices since.
Four cargoes were waiting outside China as either buyers had failed to open letter of credits (LCs) or quarantine authorities had not issued import permits, they said.
In the absence of Chinese interest for any fresh deals, some traders said freight rates to China from South America shrank to $40-$45 per tonne, down from about $90 in April.
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