Grain Shipments to Japan Delayed

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At least nine vessels carrying grain bound for Japan have been unable to discharge their cargoes due to problems at the country's ports hit by the March 11 earthquake and tsunami, but no cancellations of shipments have been reported, trade sources say.

Sources told Reuters News Service on Wednesday that some of the vessels were anchored in Japanese waters or were slowing down their arrival times as they could not offload their cargoes which included U.S. grains and soybeans from South America.

"The ships are waiting for clarity as to what is going to happen," one shipping source said. "That is creating an issue for grain houses."

A European trader at a global trading firm told Reuters one or two grain cargoes shipped by their company had been diverted to southern Japanese ports following the quake in the northeast.

But the company, which was shipping U.S. corn and wheat to Japan, had not experienced re-routing to other countries and had not seen cancellations of orders or use of force majeure clauses by Japanese buyers, he said.

The U.S. Grains Council said last week in an audio statement that it had "not heard of any cancellations in shipments.

"In fact, industry sources say buyers have asked to channel vessels or delivery to other ports or feed mills unharmed by the natural disaster," a spokeswoman said.

The rerouting of shipments and the threat from radiation leaks in northern Japan are likely to drive up shipping costs for grain and soy importers.

Shipping sources told Reuters a number of ship owners were considering avoiding high risk areas in Japan and could re-route their vessels due to fears over the potential spread of radiation.

"Some owners are definitely considering routing differently to avoid any potential radiation cloud, and passing that on to charterers (those looking to hire ships)," a shipping source said.

Another said freight costs were expected to rise if cargoes were re-routed. "This will add two to three days voyage time and rates will have to be adjusted," the source said.

 

Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

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