February 4, 2008

China soy prices up on limited stocks

Soy prices in China's major producing regions were higher in the week to Friday, as farmers were reluctant to sell due to limited stocks on hand.

In Jiamusi city in Heilongjiang province, soy prices were between RMB4,540 (US$632) and RMB4,560 (US$635) per tonne, up from around RMB4,460/tonne (US$621) a week ago.

Trading volume was light as most traders have stopped buying.

Soy prices are unlikely to change much in the next week as farmers will be on holiday for Lunar New Year, analysts said.

Soy oil prices were lower, since traders have completed preparations for the coming holiday and were not actively buying, according to the China Soybean Network.

In southern Guangdong province, fourth-grade soy oil prices were at RMB11,800-RMB12,000/tonne (US$1,643-US$1,670) compared with RMB12,000-RMB12,200/tonne (US$1,670-US$1,698) last week.

In Shandong province, fourth-grade soy oil was at RMB12,000/tonne (US$1,670), down from RMB12,100-RMB12,300/tonne (US$1,684-US$1,712) a week ago.

Traders expect soy oil demand to stay low during the holiday season.

Soymeal prices were also lower on weak demand from the feedmeal sector, as pigs are being slaughtered for the holiday.

The heavy snowstorms in southern China also capped demand for soymeal, which will remain sluggish ahead of the holiday, the China National Grain and Oils Information Center said in its weekly note.