RI and Malaysia hold off purchase of soymeal

RI and Malaysia hold off purchase of soymeal

SINGAPORE (Reuter): Malaysia and Indonesia are looking to buy up to 100,000 tons of soymeal for late-1996 delivery, but are holding back because they find prices too high, regional traders said yesterday.

"I think both countries still have some slots for meal," a senior trader with a Western commodity house told Reuters.

"The story in this region is meal demand," another trader said. "I don't see anything else but hand-to-mouth activity here. It's all small stuff at the moment."

Both nations may buy three or four more cargoes of soymeal for around US$300-$305 a ton C&F, but prices of new crop Indian soymeal on a Panamax vessel for November/December shipment are now quoted around $318-$325 a ton C&F.

U.S. low-protein soymeal was indicated at about $320 a ton C&F, they said.

Thailand is also looking at some cargoes of soymeal going into next year, but further details were not available. On Wednesday, Bangkok-based traders said Thailand was close to clinching a deal to buy 25,000 tons of soymeal and 15,000 tons of soybeans from the U.S. for October shipment.

Activity in the rest of Southeast Asia remained subdued.

Malaysia, which recently bought 25,000 tons of Argentine wheat, was also said to have purchased another batch of new crop corn and wheat for April/May delivery, one commodity house trader in Singapore said.

Another dealer said the Malaysians bought about 20,000 tons, but there were no details on prices.

"There's bits and pieces of some reasonable demand coming in here," a trader said.

Most buyers around the region were also keen to make purchases of Argentine corn for the April-June period. Argentine corn is currently priced about $20 a ton below U.S. corn.

U.S. corn was indicated at around $160-$162 a ton C&F Southeast Asia for November/December shipment on a Panamax vessel, they said.

One trader said there may also be some interest for small lots of 3,000 to 5,000 tons of corn from Burma and Vietnam in the next few months.

Regional traders said they did not expect a report that South Africa may be facing a shortage of up to 700,000 tons of yellow maize would affect corn shipments to Southeast Asia.

"I'm very surprised at the report. They just held an export tender yesterday," one leading trader said, adding that he expected the South Africans to proceed on their export commitments to the Middle East and Indonesia.

"I believe it is more likely they (South Africa) will import 200,000 tons of corn and that will have only a slight impact in the market," another dealer said.

One analyst said many buyers in the region were also waiting for the U.S. corn crop harvest to get into full swing in about 15-20 days time before finalizing their buying orders.

"There's this gap to bridge before we get to the harvest. There are also questions over whether China will export some corn next year which is overhanging the market," he said.

Another factor the trade is watching is the threat by the United States to re-introduce grain export subsidies following the European Union's (EU) recent move to bring them back.

The EU last week cleared the way for traders to seek export subsidies for wheat exports by canceling an export tax mechanism in place from last December.

"There's already been an uproar about that. It seems ridiculous for the EU to do that," an analyst said.

Dealers said U.S. subsidies would benefit countries around the region and may boost sales of U.S. wheat.

John Howard of U.S. Wheat Associates said the marketing group may be forced to ask Washington to revive export subsidies suspended in July 1995.

"We don't want to do it. We love public tenders. We love to go head-to-head," he said. "It (export subsidies) would be a very effective tool to combat unfair trade practices or (EU) subsidies."