BEIJING, China (Reuters) — Ships carrying as much as 700,000 tonnes of soybeans are lined up along China’s coast waiting to discharge, traders said, as huge purchases in recent months by the world’s top buyer led to severe congestion and lifted stockpiles to multi-year highs.
The slowdown at the ports and long wait times to clear customs may threaten a recent rally in Chinese soymeal prices and may stir concern about demand from major exporters Brazil and the United States.
The worst congestion is at Rizhao, one of China’s top ports for soybean imports, where six or seven vessels carrying about 400,000 tonnes of the oilseed were waiting to discharge late last week, said a trader with an international firm who declined to be identified.
“The beans can’t be discharged because they don’t have enough warehouses,” the trader said.
Eleven boats were waiting to anchor at Rizhao the previous week, with two more waiting to unload, according to data from Shanghai JC Intelligence Co.
More vessels elsewhere in China, with around 300,000 tonnes of soybeans, were also stuck at ports, said another trader at an international firm that also runs processing plants in China.
China imported a record 9.59 million tonnes of soybeans in May, and arrivals last month probably reached about nine million tonnes, traders said.
However, while buyers rushed purchases, tougher customs inspections have slowed movement of cargoes through ports.
Soybeans discharged into port warehouses are often held for up to a week before being certified for import by quarantine authorities, the first trader said.
A reduction in value-added tax on soybeans to 11 percent from 13 percent from July 1 also pushed some buyers to delay imports, added the second trader.
“If your boat comes a few days before July 1, it is better to wait,” he said.
The huge imports in recent months have already pushed soybean stocks at Rizhao port near a four-year high at 486,460 tonnes last week, while stocks in all ports have reached around seven million tonnes, the China National Grain and Oils Information Center (CNGOIC) said July 5.
Weekly stocks of soymeal crushers’ main product hit 1.2 million tonnes last week, the highest in at least six years, as supplies far outpaced demand.
Crushers in Shandong province were losing $38 per tonne processing imported soybeans last week before a rally in Chicago helped lift prices.
Port congestion is expected to continue with around 8.5 million to nine million tonnes due to arrive this month, including two million tonnes into Shandong province alone, the CNGOIC said.