The whole story of the 2004 soybean crisis

February 18, 2008 10:46 "China Economic Weekly"

In August 2003, the United States Department of Agriculture Due to weather effects, major adjustments were made to the monthly soybean supply and demand report, and the soybean inventory data was adjusted to the lowest level in more than 20 years. As a result, CBOT soybean prices rose from a low of about 540 cents in August 2003 to about 1,060 cents in early April 2004, setting a new high in the past 30 years. This increase is equivalent to the domestic price in China rising from RMB 2,300 to RMB 4,400 per ton.

Under the control of panic, Chinese crushing companies have increased their purchasing efforts. In early 2004, more than 8 million tons of soybeans were "snatched" in the United States, equivalent to a high average price of RMB 4,300 per ton.

But then, starting in April 2004, international soybean prices fell rapidly, falling by nearly 50%. Domestic soybean processing has turned from a profit to an industry-wide loss.

Faced with such a price difference, some domestic processing companies, especially private companies, had no choice but to breach the contract and abandon the purchase contracts and deposits originally signed at high prices. The so-called "shipwash" incident.

In response, the measures taken by the United States include: some large international soybean suppliers sued Chinese importers for breach of contract, with the claim amount estimated to be as high as 6 billion yuan; international grain merchants boycotted Chinese private enterprises, except for some of them Except for Chinese companies with equity participation, they no longer offer quotations to other Chinese importers; these suppliers jointly revised the text of their soybean export contracts to China, and the revised contract terms were even more unfavorable to Chinese importers. So far, the dispute remains unresolved. (Yang Mei)

The above is a repost, and the following is my personal addition:

I remember that this "collective procurement" was organized by the leaders of the Ministry of Commerce, leading a huge group of Nearly twenty soybean crushing companies participated in the purchasing group, which was promoted with great fanfare before the trip and was even reported on CCTV News! After receiving the information, CBOT (Chicago International Soybean Futures) soybean prices skyrocketed. After the Chinese finished pricing and placed an order for eight million tons, the CBOT price immediately plunged!

This purchase caused heavy damage to China’s private soybean crushing enterprises, with a shipload of soybeans losing hundreds of millions of yuan (a shipload of soybeans is Panamanian-grade, with a loading capacity of 50,000 to 80,000 tons, and one ton of compensation is Two thousand yuan, a shipload of soybeans would cost more than 100 million yuan), almost the entire army was wiped out, and those who managed to escape were due to operational difficulties. According to conservative estimates, this purchase caused at least 15 billion losses to China’s crushing industry! The four major international grain merchants (ABCD, of which A is ABM (Archer Daniels Midland), B is Bunge, C is Cargill, and D is Louis Dreyfus), took the opportunity to acquire at low prices, Participating in many soybean crushing companies in China has paved the way for international grain merchants to expand their presence in China.

Among the private crushing companies in China, the one that suffered the most was Dalian XX Group. Its Dongguan XX, Zhanjiang XX, Nanjing XX, and Bazhou XX were forced to be sold to international grain merchants, and the Sichuan XX that was under preparation was forced to be discontinued. , only two companies in Dalian are barely supporting, and they are basically in a semi-stop production state.