February 25, 2008

 

China soy prices higher on limited supply

 

 

Soy prices in China's major producing regions were higher in the week to Friday, as farmers were reluctant to sell in expectation of higher prices due to reduced supply.

 

Soy prices in Jiamusi city in Heilongjiang province were around RMB4,740 a tonne, compared with RMB4,560-RMB4,600/tonne the previous week.

 

However, the higher prices failed to attract volumes since farmers were away for the Lunar New Year holiday and the Lantern Festival, which fell on Thursday.

 

Soy farmers in Heilongjiang province are increasingly reluctant to sell as they have only 10 percent to 20 percent of last year's harvest on hand.

 

Soyoil prices were higher on surging soyoil futures prices at the Chicago Board of Trade and Dalian Commodity Exchange.

 

The futures prices were boosted by expectations of higher edible oil demand from China after major rapeseed-producing areas in the south were heavily hit by snowstorms. However, the actual demand has diminished since the Lunar New Year holiday.

 

Low stocks at soyoil processing plants - a result of high sales ahead of the holiday - also helped push up soyoil prices, the China National Grain and Oils Information Center said in its weekly report.

 

In southern Guangdong province, fourth-grade soyoil prices were RMB12,600-RMB13,100/tonne, compared with RMB12,100/tonne a week earlier.

 

In Shandong province, fourth-grade soyoil was RMB12,800-RMB13,400/tonne, up from RMB12,600/tonne last week.

 

Soymeal prices were also higher on rising soy prices. In Guangdong province, the prices of average-protein soymeal were RMB3,750/tonne, compared with around RMB3,650/tonne last week.

 

In Jiangsu province, the prices of average-protein soymeal were RMB3,760-RMB3,800/tonne, higher than RMB3,720/tonne a week ago.

 

But analysts said it would take longer for feedmeal demand to recover as the hog and poultry industries have been heavily hit by the snowstorms.

 

The government aims to fully restore livestock and poultry production by August and that of hogs by December, the Ministry of Agriculture said this week.