January 18, 2008

 

China soy prices higher; processing plants raise prices

 

 

Soy prices in China's major producing regions were higher in the week to Friday, in reaction to local big processing plants raising prices and farmers' reluctance to sell.

 

Soy prices in Jiamusi city in Heilongjiang province were around RMB4,460 a tonne, up from RMB4,380-RMB4,420/tonne a week ago.

 

Soy prices in Qianjin in the province were around RMB4,420/tonne, up from RMB4,300-RMB4,360/ton a week earlier.

 

Farmers have already sold more than 80 percent of their soy harvested last year and are not actively selling in expectation of higher prices after the Chinese New Year holiday.

 

A surge in soy futures on the Chicago Board of Trade this week also helped support domestic soy prices.

 

Although last Friday's USDA report on annual crop production, quarterly grain stocks and supply and demand projections was only neutral or mildly bearish for soy, it showed corn and wheat stocks were much lower than expected, fueling the rise in the crops' prices.

 

"The resultant rallies in corn and wheat left beans with only one option; rally in step to avoid losing the acreage war," said futures commission merchant Penson GHCO in its report.

 

Soyoil prices surged on rising soyoil prices on CBOT.

 

In southern Guangdong province, fourth-grade soyoil prices were between RMB12,000-RMB12,300/tonne, up from RMB11,300-RMB11,400/tonne last week.

 

In Shandong province, fourth-grade soyoil prices were between RMB12,200-RMB12,450/tonne, up from around RMB11,700/tonne a week ago.

 

But high prices may curb the increase in demand, and the government's price control measures will help rein in fast growth in commodities, said analysts.

 

China Wednesday imposed price controls on essential commodities including edible oils, grains and their products, liquefied petroleum gas, dairy products and meat and eggs to curb a sharp rise in food prices after a series of measures last year failed.

 

Soymeal prices were also higher on rising soy prices on CBOT.

 

Demand for soymeal is likely to rise in the coming weeks due to purchases by feedmeal processing plants ahead of the Chinese New Year, said the China National Grain and Oils Information Center.

 

In Guangdong province, prices of average-protein soymeal were at RMB3,700/tonne, up from around RMB3,550/tonne.

 

In Jiangsu province, prices of average-protein soymeal were also around RMB3,700/tonne, compared with RMB3,660/tonne a week earlier.