Chinese importers unable to open letters of credit (L/Cs) have defaulted on at least 500,000 tons of US and Brazilian soybean cargoes worth around US$300 million.

This is the biggest default position in the sector for ten years, as losses in China's bean processing industry make it increasingly difficult for importers to obtain credit.

L/C difficulties

Three companies in the eastern province of Shandong have defaulted on payments for soybean shipments due to their inability to open import L/Cs with banks, according to Reuters.

The news agency says that five or six panamax cargoes of soybeans have not been unloaded at Chinese ports.

Slowing economy

The soybean defaults follow a spate of defaults in China on loans, bonds and shadow banking products in recent weeks.

The defaults underline tighter credit conditions in China as its economy slows.

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