January 31, 2011

China's soy market quiet before holiday

Soy prices in China's major producing areas were mostly unchanged in the week to Friday (Jan 28), as buyers have left the market and farmers stopped selling ahead of the Lunar New Year holiday.

Soy prices in Heilongjiang province, whose output accounts for 40% of the nations' total, stood around RMB3,800 (US$577)/tonne, unchanged from a week earlier.

Imported soy prices at major Chinese ports are around RMB4,250-4,300 (US$645-$653)/tonne, also unchanged.

China sold 62,892 tonnes of soy out of 142,862 tonnes offered from Heilongjiang provincial reserves at an auction Friday at RMB3,775 (US$573)/tonne, up from 34,733 tonnes last week, as higher imported soy prices prompted more buyers to choose local soy.

The profit margin for crushing imported soy is around RMB100-150 (US$15-$23)/tonne, on par with local soy, analysts said.

Prices of imported soy for April delivery will rise to about RMB4,500 (US$683)/tonne, and crushers will suffer losses if the prices of edible oils continue to be capped by then, they added.

Although prices of imported soy are much higher than local products, crushers still prefer the former because of higher oil-extraction rates and higher protein content in soymeal, experts said.