February 28, 2011

China's soy prices dip on global market slump

Soy prices in China's major producing areas and ports fell slightly in the week to Friday (Feb 25), tracking declines in international futures markets.

Prices in Harbin, Heilongjiang province, were down about RMB20 (US$3)/tonne RMB3,740-3,860 (US$569-587)/tonne, while imported soy in major Chinese ports including Shandong and Jiangsu were down RMB50 (US$7.60)/tonne to RMB4,250 (US$646)/tonne.

High soy stocks at ports of around 6.15 million tonnes as of February 18 put downward pressure on cash soy prices, the Beijing Municipal Grain Administration Bureau said.

Some crushers have been forced to suspend operations due to poor crushing margins, as costs are high and retail prices of edible oils are capped, the bureau said.

Physical soyoil prices at major ports are around RMB10,300 (US$1,566)/tonne, down RMB250 (US$38)/tonne from a week ago.

The government sells edible oils regularly from state reserves to keep prices in check. The National Grain & Oil Trade Centre said Friday that it will sell 100,000 tonnes of rapeseed oil this week. It has sold a combined 772,820 tonnes of edible oil since October last year.

Meanwhile, the government had purchased 1.9 million tonnes of soy from farmers for state reserves as of February 20, according to the Chinese Grain Network.

Crushing margins fell sharply in the week but were still in positive territory, the consultancy said.