January 26, 2005

China soybean prices flat to down in slow trade, buyers bearish

Soybean prices in China's major soybean producing areas were flat to lower in slow trade in the week to Wednesday, with buyers bearish on market demand for soy products, traders said.

Soybean prices in the region were on average RMB2,600 a ton, slightly lower on week.

A trader in Jilin province revealed that with demand for soyoil and soymeal not keeping pace with expectations ahead of the country's major Spring Festival holiday, crushers have had  to reduce or cease soybean purchases. Also, farmers showed some reluctance to sell at market prices below last year's."

In Heilongjiang, China's largest soybean producing province, local soybean prices were quoted between RMB2,460-2,520, flat to lower from a week ago, a Harbin-based trader said.

The trader said he expects soybean price movements move downwards after the Spring Festival as seasonal demand for soy products weakens. Yet, imports of soybean have not shown signs of abating.

The country imported 2.20 million tons of soybeans in December 2004, up 40.7% on year, bringing total imports for 2004 to 20.23 million tons, down only 2.4% on year.

"Imports may slow in the first quarter, but so does demand," the Harbin trader said.

In addition, China's soybean output in 2004 is said to have hit a record high, but most of this are remaining in barns.

In Dalian City, the major gateway for shipping grains produced in northeastern China, the average price for domestic soybeans hovered at RMB2,700/ton, down RMB50 from a week earlier. Imported soybeans were quoted around RMB2,800/ton, also down RMB50 due to ample supply, a local analyst said.