February 12, 2007

China soybean prices up on higher soymeal prices

Soybean prices in China's major soybean-producing regions rose in the week to Friday (Feb 9), supported by rising soymeal prices.

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 RMB60 a tonne higher than a week earlier.

In Harbin, the provincial capital, prices were quoted around RMB2,660-2,700/tonne compared with RMB2,600-2,650/tonne a week earlier.

Prices in the north-eastern part of the province were around RMB2,540-2,580/tonne, RMB40-60/tonne higher than in the previous week.

Soymeal cash prices were RMB60-RMB100/tonne higher on average this week compared with the previous week, as feed plants stepped up their purchases to top up their reserves ahead of the Lunar New Year holiday in mid-February, said Liu Xinghua, a trader at Great Wall Futures Co.

Meanwhile, supplies were reduced as many farmers have already started preparing for the holiday, said Zhang Liwei, an analyst at the China National Grain and Oils Information Centre.

The Lunar New Year will fall on Feb 18, a Sunday. Government offices, businesses and financial markets will be closed Feb 19-23. However, farmers typically take a much longer break, which can last as long as a month.

Zhang expects soymeal prices to be stable next week, as supply and demand will likely be steady due to the holiday.