Brazilian Soymeal Sales Stutter On Concerns Of Swine Flu
April 28 2009 - 4:44PM
Dow Jones News
Major international trading companies are nervously watching as
soymeal sales stutter on the impact of swine flu, a chief trader at
a major U.S. soy exporter said Tuesday.
"Sales have stopped [for soymeal] and we'll have big problems if
we can't move it," the trader told Dow Jones Newswires.
Companies such as Bunge Ltd. (BG), Archer Daniels Midland Co.
(ADM) and Cargill Inc. have seen sales almost slump in recent days
as buyers stopped purchasing soymeal used for animal feed. "They
have stopped buying or are just buying hand-to-mouth," the trader
said.
Brazil is a major world producer of soybeans, which get crushed
into soymeal and sold, often as animal feed. Brazil is the No. 2
soy exporter behind the U.S. and soy derivatives are an important
part of Brazil's trade balance.
Steve Cachia, a grains analyst at brokerage firm Cerealpar, said
a reduction in the consumption of pork could lead to a reduction in
the demand for animal feed. This would hit soymeal.
But Cachia said it's still too early to know the impact of the
swine-flu outbreak on meal sales.
Cachia said Brazil exported 2.34 million metric tons of soymeal
between January and March, up 12% from the same period a year
ago.
He expects soymeal exports to remain steady in 2009 from around
12.2 million tons in 2008.
The swine flu has affected everything from soy prices to
aviation stocks.
July soybeans closed down 14 cents at $9.83 a bushel Tuesday on
the Chicago Board of Trade, while July soymeal closed down $2.30 at
$304 per short ton.
Although commodity prices have been dropping, it's still too
early to know the impact on animal feed prices, said Pedro de
Camargo Neto, director of Abipecs, a pork industry association.
"We need to wait and see how this plays out," he said.
-By Tony Danby, Dow Jones Newswires; 55-11-2847-4523;
Anthony.Danby@dowjones.com