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M.R. Subramani

Chennai, Nov. 8

A MOVE by Chinese buyers to reportedly cancel four contracts of 13,000 tonnes each of soyameal from the country is seen as a temporary problem and the industry is hoping to renegotiate the deal.

"Reports of China cancelling contracts are not surprising. Such things were expected from the Chinese. That's why exports to China are made at a premium and only a few come forward to do deals with them," said Mr Rajesh Agrawal, Chairman, Soyabean Processors Association of India (SOPA).

Market sources said the Chinese usually follow such tactics when they buy at higher prices and the rates begin to decline in the global market.

A Reuters report said the Chinese buyers had cancelled the contracts on growing fears that bird flu could sharply cut commercial feed demand, regional traders said on Tuesday.

The report quoted Chinese buyers saying that the meal had been bought meal at about $235 per tonne c&f and the prices had fallen to $225 per tonne.

``Chinese buyers are saying they won't be able to take the cargoes at those high prices as bird flu fears are rising,'' a trader was quoted by the report.

Mr Agrawal said bird flu would not affect consumption of meal much.

"Only a few thousand birds have died and that too, in one small region. The cancellation could be more of a pressure tactic," he said.

SOPA had not received any complaint from any of the exporters so far on cancellation. "If the problem comes to us, we will take proper action under normal framework. We will try and settle things mutually," he said.

Prices for soyameal had declined $10-15 per tonne in the last couple of days, but chances of the rates dipping further were remote, he said.

"Currently, prices are significantly low. The crushing margins are also low. Besides, various rumours such as cut in customs duty on crude palm oil are driving the market down," Mr Agrawal said. "The market sentiments are lower and this development, too, will hurt," he said.

China has booked 2-2.3 lakh tonnes of soyameal for near term shipment and over one lakh tonnes have been delivered.

On Tuesday, soyameal in Indore was quoted at $197-199 per tonne f.a.s Kandla port against $202-203 last week.

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