UPDATE 1-China buyer defaults on US soy as CBOT slumps -trade

(Recast with quotes, background)

HONG KONG, March 20 (Reuters) - Word that a Chinese buyer had defaulted on the purchase of a U.S. soy cargo has stoked concerns that more defaults may occur, as international prices of oilseeds and vegetable oils slide from record highs early this month.

Traders said the default involved a buyer in the northern province of Shandong, but they declined to provide further details.

There also had been defaults of one or two cargoes of soyoil from Argentine, and quite a few on palm oils since the buyers could not afford to pay cancellation fees of more than $200 a tonne following the slump in futures, they said.

"There has been a default on an expensive soy by a small player in Shandong. This has been confirmed," said a senior trader at an international house.

The trader added there had been some defaults on soyoil and possibly as much as 150,000-200,000 tonnes of palmoil.

During the sharp rally in futures <0#S:> <0#BO:> <0#KPO>, Chinese were aggressive buyers of soybeans, soyoil and palmoil, encouraged by strong cash vegetable oil prices at home in the wake of snow storms that damaged the country's rapeseed crop.

The traders estimated China was buying about 300,000 tonnes of soyoil per month, while booking 500,000 tonnes of palm oil for shipment of up to June or July.

Costs for imports of soyoil prices from Argentina have come down to about $1,300 a tonne, including costs and freights, from close to $1,500 two weeks ago, while palm oil prices fell to $1,200 a tonne from above $1,400, they said.