February 2, 2007

China soybean prices rise on snowfall in north-eastern regions

Soybean prices in China's major soybean-producing regions rose in the week to Friday as recent snowfall in north-eastern parts of the country hampered deliveries, tightening market supply.

In north-eastern Heilongjiang province, China's largest soybean-growing region, prices of average quality soybeans in its two main soybean trading centres were on average RMB10-80/tonne higher than a week earlier.

In Harbin, the provincial capital, prices were quoted about RMB2,600-2,650/tonne compared with RMB2,600-2,640/tonne a week earlier.

Prices in the north-eastern part of the province were about RMB2,600/tonne, up from RMB2,480-2,520/tonne in the previous week.

"Traffic was not smooth due to this week's snowfall in the province, affecting the supply of soybeans," said Li Yunfeng, an analyst at the China National Grain & Oils Information Centre.

A general uptrend in edible soybean prices in the run-up to the Chinese Spring Festival (Chinese New Year) later this month, as well as rising imported soybean prices, also helped push up overall prices, he added.

Meanwhile, farmers are reluctant to sell, hoping that prices would rise further. So far, they have sold almost 80 percent of their 2006 harvest, drawn by strong soybean prices.

But analysts said soybean prices are unlikely to climb further as buyers are very cautious amid uncertainty over the direction of futures prices on the Chicago Board of Trade.