March 30, 2009

Soy prices in China's major producing areas were slightly weaker in the week to Friday (March 27), as most processing plants suspended production due to low profit margins.

 

Soy prices in Jiamusi in Heilongjiang province, a major producer, were around RMB3,320 a tonne, compared with RMB3,320-RMB3,330 the week before. Prices in Suihua in the same province were around RMB3,360/tonne, unchanged from a week ago.

 

Only 15 soy processing plants out of 68 large ones in Heilongjiang were operating this week, and the plants were reluctant to pay high prices for the crop, said Sui Zhi, an analyst in the province with Tianma Consultation.

 

The government's purchases of domestic soy at RMB3,700/tonne has shifted the demand to imported varieties, which are much cheaper.

 

Domestic demand for imported soy is likely to increase in coming weeks despite higher costs of imports, reflecting recent increases in futures prices, China National Grain and Oils Information Centre said in a note.

 

Soyoil prices were higher, supported by rising futures prices.

 

First-grade soyoil in Lianyungang in Jiangsu province was around RMB6,770-RMB6,780/tonne, up from RMB6,450-RMB6,500/tonne a week earlier.

 

In Dongguan in Guangdong province, it was around RMB6,650-RMB6,720/tonne, up from RMB6,500/tonne.

 

Suspension of production by many processing plants helped to push up prices as soyoil stocks dwindled, said analysts.

 

Soymeal prices drifted higher due to delayed soybean imports and lower production.

 

In Lianyungang, soymeal was around RMB3,230-RMB3,250/tonne, up from RMB2,900-RMB3,000/tonne a week earlier, while in Dongguan, prices were around RMB3,220-RMB3,250/tonne compared with RMB2,880-RMB2,980/tonne a week earlier.

 

However, demand for soymeal is likely to fall in coming weeks as feedmeal plants will soon complete a recent round of buying to refill stocks, according to a survey by CNGOIC.