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| China does both. The importer in question is in the commodity trade finance business. They are primarily a real estate/construction firm. With Chinese banks having clamped down on lending to real estate firms (and other sectors) they've turned to commodities for financing. The secure loans against cargos of soybeans and corn as collateral. The loans will typically run 4-6 months which usually gives them time to get them to China, sell them and then use the balance of the time left on the loan to finance their corporation. Rinse, Repeat ad infinitum. The Chinese government however has started to clamp down on commodity trade financing and that sector is finding it harder and harder to secure letters of credit. 4 cargos are at risk with another 2 having already been resold by the buyer. | |
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the following has been reported to me by two
