January 5, 2007

 

China soy prices little changed, likely to stay steady

 

 

Soy prices in China's major producing regions were little changed from those before the holiday as farmers are not keen to sell, while demand fell slightly after the holiday, keeping the market rather balanced, analysts said.

 

In Heilongjiang province, China's largest soy -growing region, prices of average quality soy s were almost unchanged at the two main soy trading centres.

 

In Harbin, the provincial capital, prices were quoted around RMB 2,500 a tonne, while prices in the north-eastern part of the province were little changed from last week at RMB 2,440-RMB 2,480/tonne.

 

Prices in Jilin province, another major producing region in the north-east, were around RMB 2,600/tonne, unchanged from the previous week.

 

"Farmers have sold 60 percent of their total stocks and they're not keen to sell the rest at the moment," said Zhang Liwei, an analyst at the China National Grain & Oils Information Centre.

 

Cash prices may not be impacted by the decline in futures prices these days in a relatively quiet market, with demand shrinking after the holiday, Zhang said.

 

Demand for soy -crushed soymeal and soyoil usually falls after long holidays, given the abundant stocks crushers have built up before the holidays.

 

Zhang said arrivals of soy imports in January are likely to reach 2 million tonnes, a relatively small amount that "would keep soy prices stable until the end of the month."

 

Traders said despite the stable soy  prices, soymeal and soyoil prices are pressured by shrinking demand.

 

"There aren't many buyers in southern China right now; crushers bought enough before the New Year's holiday," said a trader.

"If feed demand doesn't pick up soon, there would be a correction for soymeal and soyoil prices, especially if futures fall," the trader added.

 

Feed demand usually rises a month before China's Lunar New Year holiday, which falls during late February this year.