March 21, 2008

 

China's soy prices lower amid US recession concerns

 

 

Soy prices in China's major producing regions were lower in the week to Friday, amid concern that the US economy is in recession.

 

Many soy processing plants in Heilongjiang province, the major producing region, stopped purchasing - worried tumbling prices seen in 2004 may soon be repeated.

 

Soy prices in Jiamusi city in Heilongjiang were around RMB4,820 a tonne, down from between RMB4,960 and RMB5,140/tonne a week ago.

 

Soy futures prices have fallen sharply the past week, putting pressure on cash prices.

 

If the US economy continues to deteriorate, the slide in soy futures prices will likely accelerate, Heilongjiang Jiusan Oil And Fat Co. said on its Web site.

 

Meanwhile, a promising soy crop now being harvested in South America, expected to arrive in China in April, also hit sentiment - as did sluggish soyoil and soy sales.

 

Soyoil prices fell as the government steadily released soyoil into the market.

 

China's biggest grain and oil trader, COFCO Ltd., said Monday it would expand its edible oil production to meet market demand.

 

The company said it aims to produce 42,000 tonnes of edible oil this month and release all of it to the market soon.

 

COFCO supplied the market with 60,260 tonnes as of March 1, up 22 percent on-year.

 

Many buyers stayed on the sidelines as prices tumbled, and soyoil demand is unlikely to pick up significantly before prices stabilize, the China National Grain and Oils Information Center said in its weekly research note.

 

Soymeal prices also fell on lower futures prices.

 

Soymeal prices in Rizhao were between RMB3,700 and RMB3,800/ton, down from RMB3,800-RMB3,850/ton the previous week.

 

Soymeal prices in Dongguan were at RMB3,650-RMB3,700/ton, down from between RMB3,750 and RMB3,850/ton.

 

The demand for soymeal is unlikely to pick up until April, when the weather turns warmer and the livestock industry recovers, the information centre said.