March 2, 2009
Poor margins force China soy plants to reduce soy imports
Some China soy crushers will reduce soy imports in coming months as crushing margins have turned negative due to falling domestic soymeal and soy oil prices, according to a survey by China National Grain and Oils Information Centre (CNGOIC).
The centre said China has cancelled two to three US soy cargoes as they prepared for a bearish market for soy prices and a large volume of imports for February and March.
Soy plants that crush imported soy were unable to make a profit and were unlikely to offer lower prices for soy oil.
However, soy oil prices are expected to recover which may prompt traders and end-users to increase soy purchases in coming weeks.
Meanwhile, trading of soymeal picked up last week as prices fell. Thus, feed mills may increase soy purchases on low inventories.
