Hurricane damage impacts US crop shipments to Asia

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SINGAPORE – Asia’s grain and oilseed buyers are set to face shipping delays of at least one month after Hurricane Ida damaged key export terminals around the US Gulf Coast, two traders and one miller said.

The slowdown in supplies is likely to stoke food inflation fears for price-sensitive consumers in Asia, where many importers have already drawn down crop inventories after having been forced to curb purchases amid volatile crop prices and COVID-related supply disruptions this year.

Importers led by top soybean buyer China, major corn buyer Japan and number two wheat importer Indonesia are likely to take a hit after top exporters such as Cargill suffered damage to grain-loading facilities.

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“We have trading companies asking us to roll over shipping contracts from September to October, as it will take at least one month to get things back to near normal,” said one trading manager at an international company which runs soybean and wheat processing plants across Asia.

“There is also talk of cancellations.”

The sources declined to be identified because they weren’t authorised to speak to the media.

Hurricane Ida, which roared ashore last week, caused damage to at least three of the nearly dozen export terminals dotted along the Mississippi River from Baton Rouge to the Gulf of Mexico. The busiest US grains export outlet remained severely limited on Tuesday, even after the US Coast Guard reopened the lower Mississippi River to shipping traffic over the weekend

Exporters said deals for grains and soy shipped from Louisiana Gulf terminals have stalled as most terminals remain dark, shifting demand to other locations such as the US Pacific Northwest or Brazil.

China booked up to five bulk cargoes of US soybeans for December shipment from the Pacific Northwest overnight, said two traders with knowledge of the deals. The US Department of Agriculture (USDA) also confirmed sales of 106,000 tons of US soybeans to China on Wednesday morning in the first daily soybean sales announcement in a week.

In Brazil, prices at ports have been rising in recent days, from under 167 reais per 60 kilo bag to 169 reais or more, according to Cepea, a research center at the University of Sao Paulo. Large exporters have been bidding up for beans to ship this month, trade sources said.

The damaged infrastructure has already had an effect on export volumes.

US exporters inspected just 68,059 tons of soybeans for shipment in the week ended Sept. 2, down 82 percent from a week earlier and 96 percent less than the year-ago period. Corn exports of 275,799 tons were 53 percent lower than the week prior and 69 percent below the same week a year ago, according to the US Department of Agriculture (USDA). – Reuters

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