Three major soybean importers in eastern China’s Shandong province have defaulted on more than US$300 million worth of contracts after failing to receive letters of credit from banks, 21st Century Business Herald reported Tuesday, citing sources.
The contracts with Marubeni Corp. involve more than two million tons of soybean.
China ordered more than 20 million tons of soybean in the first quarter but actual imports were just 15.35 million tons, Zhang Xiaoping, chief representative of the United States Soybean Export Association in Beijing, was quoted as saying.
Chinese importers prefer default to negotiation with foreign exporters because the cost of breaking a contract is lower than saving it, the report said.
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