Bird flu pressures China soy, talk of India default
HONG KONG, Oct 31 (Reuters): China, the world's top soy importer, has slowed down purchases of the oilseed from the United States as worries over bird flu eat into domestic poultry consumption and farmers hesitate to build up their flocks.
Traders and industry officials in China said today there was also talk of default of one Indian soymeal cargo. Indian suppliers had oversold meal early this month when they signed sales for more than 200,000 tonnes to China.
"Poultry prices are coming down nationwide," said a soy trader in northern China. "Based on today's scenario, we don't think we will see more (soy) demand for November. And for December, they won't be aggressive."
Three areas hit by bird flu in the provinces of Hunan, Anhui and Inner Mongolia remained closed, it said Monday.
With bird flu outbreaks reported at the start of the winter, industry officials said Chinese farmers were reluctant to re- stock their flocks in the run-up to Chinese Lunar New Year celebration in January, the peak consumption season.
This might lead to Chinese US soy imports slumping as much as 15-20 per cent this season from a record 11.85 million tonnes in 2004/2005 unless US farmers decide to compete against South American suppliers towards the end of the season in March.
Adding to the bearish sentiment are large arrivals of soy expected in November, which some traders estimated at 2.5-3 million tonnes after an expected 1.6-1.7 million in October. September imports were 1.87 million tonnes.