February 20, 2009

Soybean prices in China's major producing areas were mostly lower in the week to Friday, pressured by tumbling prices in the futures market.

 

Soybean prices in Harbin city in Heilongjiang, a major producing province, were around RMB3,500 a metric tonne, unchanged from a week earlier.

 

In Jiamusi in the same province, prices were between RMB3,380-RMB3,440/tonne compared with RMB3,400-RMB3,440/tonne the week before.

 

Soybean futures traded on the Dalian Commodity Exchange and Chicago Board of Trade have been falling sharply this week on a gloomy global economic outlook and improved weather outlook for South American soybean producing areas.

 

Trading was light, as traders and processing plants mostly stayed on sidelines while farmers held on to stocks, waiting for prices to rise, said analysts.

 

But soybean prices have very limited room to rise due to sluggish soyoil and soymeal sales, the China Soybean Network said in a note.

 

Meanwhile, soybean importers are more inclined to stay on the sidelines amid the tumbling futures.

 

Supply of imported soybeans is likely to be ample as soybean arrivals in the coming three months will remain high, according to the China National Grain and Oils Information Center, which expects near-month soybean imports to decrease ahead of a further fall in global soybean prices.

 

But as imported soybean costs are much lower than domestic soybean prices, purchases for forward-month South America soybeans will remain high, it said.

 

Soyoil prices were lower on the fall in futures and weak demand.

 

First-grade soyoil prices in Dongguan, Guangdong province were between RMB6,850-RMB7,050/tonne, down from RMB7,080-RMB7,200/tonne a week ago.

 

In Rizhao, Shandong province, they were around RMB6,800-RMB7,000/tonne, down from RMB7,100-RMB7,150/tonne.

 

However, some analysts expect the tight supply to help support soyoil prices somewhat.

 

China only imported 20,000 tonnes of soyoil in January, down 87% on year.

 

Soymeal prices were lower on sluggish demand.

 

In Dongguan, soymeal was around RMB2,960-RMB3,150/tonne compared with RMB3,190-RMB3,250/tonne a week before.

 

In Rizhao, soymeal was around RMB2,950-RMB3,120/tonne, down from RMB3,220-RMB3,300/tonne a week ago.