February 13, 2006

 

China soybean prices slightly higher in thin trade

 

 

Soybean prices in China's major soybean-producing regions rose slightly this week (ending Feb 10) on strong crushers' demand after their stock of products like edible oils were depleted during last week's Chinese New Year holiday.

 

However, the market was still relatively quiet as many enterprises would not resume business until early next week, people in the industry said.

 

In Harbin, the capital city of Heilongjiang province--China's largest soybean-producing region--prices of average quality soybeans rose RMB20/tonne to around RMB2,520-2,540/tonne, compared with the prices the week before last.

 

"Farmers are reluctant to sell in anticipation of higher prices, which was what happened last year after the holiday, and they had only sold half of the total production harvested at the end of last year so far," said Zhang Liwei, an analyst with China National Grain and Oils Information Centre.

 

Meanwhile, crushers that have already resumed operations after the holiday are eager to buy, Zhang said.

 

In January, 1.65 million tonnes of imports arrived in China, and in the first ten days of February, about 200,000 tonnes arrived, according to statistics provided by COFCO Futures Co.

 

China National Cereals, Oils and Foodstuffs Corp, a major grains trading company, holds a controlling stake in COFCO Futures Co.

 

Analysts said although the arrivals in January and February are usually smaller than in the rest of the year, ample stocks built up at the end of last year will keep a cap on the prices.

 

"Even if cases of bird flu outbreaks do not increase significantly, local soybean prices are not likely to increase much," Zhang said.

 

However, he added the price of soybean futures traded on the CBOT may influence the local market.