February 18, 2005
China's rapeseed meal market weekly report: tight supplies lead prices higher (week ended February 18, 2005)
An eFeedLink Exclusive Report
1. Price summary
Rapeseed meal prices were generally higher by RMB20-50/ton in the first week of trading following the Spring Festival. In central and eastern China, transactions were concluded at about RMB1,280/ton while in the southern consumption regions, prices averaged RMB1,400/ton.
Feed millers have started to make more price enquiries in the market. This has pushed up rapeseed meal prices, as stocks remain limited with some crushers still on leave. An upside in soybean prices also led rapeseed meal prices higher.
2. Market analysis
Analysts attributed the price rise in the week to the following:
Tight rapeseed meal supply
Crushing activities have not fully resumed in the week and current supplies were those carried over from the period before the Spring Festival. Prior to the holiday break, small and medium feed millers had supplies sufficient only for short-term production and were thus eager to replenish stocks.
With feed millers eager to replenish their stocks, crushers and suppliers have taken this as an opportunity to raise prices. Limited rapeseed meal supplies have driven up prices in the main production regions of Anhui, Hubei and Guizhou.
Sales of rapeseed oil remain lacklustre
Demand for rapeseed oil has entered a lull period following the Spring Festival. Current prices of rapeseed oil have stayed weak amid falling transaction volumes.
In Hunan, Anhui and Jiangsu provinces, rapeseed oil prices have fallen by RMB100/ton from pre-festival levels. Lacklustre rapeseed oil sales have provided support for rapeseed meal prices.
Firmer soymeal prices
CBOT soybean prices rebounded strongly during the Spring Festival week, pulling up soymeal prices in China after the Spring Festival. Firmer soymeal prices have provided support to rapeseed meal prices.
This week, soymeal prices in central and eastern China as well as those in southern China have risen by RMB20-40/ton to close at RMB2,350-2,380/ton and RMB2,450/ton respectively.
3. Market forecast
China's aquaculture industry will be resuming operations as the weather gradually warms up to spring. Consequently, the pick-up in rapeseed meal demand will lend support to prices.
Crushers are likely to be hesitant to resume crushing operations, choosing to stay on the sides in anticipation of rapeseed oil prices weakening in the near term. Rapeseed meal prices however, are expected to firm.
Crushers' production activities and profit margins, feed millers' stock replenishments and price movements of soybean related products will influence rapeseed meal prices in the weeks ahead.
|
Transacted Prices of Rapeseed Meal in China | ||||
|
Region |
% of Protein |
Date |
Price Changes (RMB/Ton) | |
|
Feb 3, 2005(RMB/Ton) |
Feb 17, 2005(RMB/Ton) | |||
|
Hubei |
35% |
1250 |
1280 |
30 |
|
Jiangsu |
36% |
1250 |
1280-1300 |
+30 to 50 |
|
Anhui |
36% |
1240 |
1280 |
+40 |
|
Sichuan |
36% |
1280 |
1300 |
+20 |
|
Hunan |
36% |
1250-1280 |
1280-1300 |
+20 to 30 |
|
Guangdong |
36% |
1380-1400 |
1400-1420 |
+20 |
| Remarks: Prices indicated above are representative, and are for reference only. | ||||
