by Nao Nakanishi
REUTERS NEWS SERVICE

SINGAPORE, 28th November 2001 - Beijing is likely to release long-awaited details of China's new rules on genetically modified organisms, not perhaps this week as some market participants had expected but in the near future, traders said yesterday.

But the details themselves might not unleash large demand for U.S. soybeans - 70 percent of which are genetically modified - as weak domestic prices for soy complex had squeezed crushing margins to almost nothing, they said.

China is also about to fling open the door for soyoil imports of possibly as much as 2.52 million tonnes next year as it joins the World Trade Organisation (WTO), they said. After almost six months of waiting and repeated disappointment, traders in China, Hong Kong and Singapore were cool to rumours Beijing would announce implementation details of the GMO regulations by the end of this week.

"Uncertainties are still there. But imports continue as crushers are buying...I don't think the uncertainties have created any bottleneck, though the pace is still slow," a trader in Shanghai said, referring to imports.

"Stocks are still very high. We still have arrivals and Heilongjiang beans. By early next year, there should be no (supply) problems."

In Beijing, officials of the Agriculture Ministry told Reuters it would not take long to release the details, but did not elaborate.

LARGE ARRIVALS
Customs data last week showed that a staggering 897,724 tonnes of soybeans, mostly from Argentina and Brazil, arrived in China in October. This was down sharply from 1.6 million tonnes in September but well above 571,421 tonnes in October 2000.

An analyst at the State Cereals Information Centre told Reuters China's port stocks of foreign beans stood still as high as one million tonnes. Another 500,000 to 600,000 tonnes were arriving this month, he said.

Traders agreed Beijing would never halt imports of soybeans as the country had an obvious deficit of the oilseed. Nor had they heard of difficulties in discharging or moving U.S. cargoes that arrived this month.

Yet they said Chinese imports in the year 2001/2002, which began in October, would not exceed last year's 11.17 million tonnes as initially expected. They might also fall short, although nobody was willing to pin down the number.

Imports of soy oil, even if not quite as much as 2.52 million tonnes, would hit crushers in China which have enjoyed government protection and multiplied in the past few years, they said. In theory, if China imported 2.50 million tonnes of soyoil, it could kill soy imports of nearly 14 million tonnes, were it not for demand for soymeal, they said.

Some traders also noted Beijing would try to restrict soy imports by traders or speculators, who were often behind large swings in domestic soy prices.

"Crushers will continue to import. The government will not stop their cargoes from coming into China," another trader in Shanghai said. "But traders and importers might have to slow down their step. The total quantity would then come down."