(Adds comments from U.S. grains exporters, Argentina source)
By Naveen Thukral and James Topham
SINGAPORE/TOKYO, April 11 At least one soybean
cargo defaulted on by Chinese importers was sold by Japan's
Marubeni Corp, three sources said, as slowing demand
and tightening credit in the world's top soybean importer hits
Marubeni is one of the biggest soybean exporters to China,
shipping 15 million to 16 million tonnes a year along with
Gavilon, which it bought last year, or about a quarter of the
country's annual imports of 60 million tonnes.
But Chinese importers have recently defaulted on at least
500,000 tonnes of U.S. and Brazil soybean cargoes worth around
$300 million, the biggest in a decade, as buyers struggle to get
credit amid losses in processing beans.
One Tokyo-based source with direct knowledge of the
situation said Marubeni incurred a loss of $4 million on four or
five soybean cargoes on which Chinese buyers defaulted as they
could not get letters of credit. The source did not know,
however, when the defaults took place.
A Marubeni spokeswoman in Tokyo declined to comment when
asked about whether Chinese buyers had defaulted on any of their
One soybean trader in Beijing said Marubeni had supplied
cargoes that were defaulted on in China, while an oilseed trade
source in Singapore said at least one of the cargoes had been
sold by Marubeni.
"One cargo which was defaulted on last week is still in
(transit)," the Singapore-based source said.
Chinese banks are becoming more selective about lending as
the country's economy slows. A string of defaults on loans,
bonds and shadow banking products in recent weeks has
highlighted rising credit risks, partly fueled by signs the
economy is slowing.
Commodity firms, along with semiconductor and software
companies, are among the most at risk of credit defaults, a
Reuters analysis of more than 2,600 Chinese companies showed.
WEIGHING ON SOYBEAN PRICES
Defaults by buyers in China, which imports more than 60
percent of the soybeans traded in the world, could cap a rally
in global prices as they come at a time of bumper supplies from
Brazil and Argentina.
A grains industry source in Buenos Aires described the
situation as serious, but added that it was too early to tell if
the defaults would directly affect shipments from Argentina.
In the United States, the North American Export Grain
Association (NAEGA) said it was a question of "know your
provider, know your buyer."
"We haven't seen anything that indicates this is anything
more than a very serious counterparty risk," NAEGA Chief
Executive Gary Martin said in an interview.
Among major U.S. traders, Archer Daniels Midland Co
said none of its vessels had been hit by the defaults while
Cargill said it did not comment on market rumors.
Bunge said it does not confirm or comment on commercial
The U.S. Agriculture Department has forecast that China will
import a record 69 million tonnes of soybeans in the 2013-14
crop year, or about two-thirds of the world's total shipments.
"The exporters are going to walk softly and tread water as
much as they can without upsetting the Chinese business because
they realize how valuable and important it is," said Mike
Zuzolo, president of Global Commodity Analytics.
U.S. soybeans fell for a second straight session on Friday,
pulling further away from a more than eight-month high reached
earlier this week, as news of the Chinese defaults weighed on
Tougher lending conditions by banks have affected soybean
importers in China, including the country's biggest buyer,
Sunrise Grain and Oil Trading Ltd, industry sources said.
Sunrise did not respond to requests for comment on Friday.
(Additional reporting by Fayen Wong in SHANGHAI, Keith Wallis
in SINGAPORE, Niu Shuping and Adam Rose in BEIJING, Hugh
Bronstein in BUENOS AIRES and the Chicago commodities team;
editing by G Crosse, Amran Abocar and Ed Davies)