April 3, 2006

 

China soybean prices mostly unchanged on reduced buying

 

 

Soybean prices in China's major producing regions were mostly stable this week, but cautious crushers are still reluctant to buy, seeing no substantial increase in local feed demand, analysts said Friday (Mar 31).

 

Although no bird flu outbreak in poultry has been reported in China since the end of February, local crushers were still buying no more than what they needed, said Zhang Liwei, a soy analyst at the China National Grain and Oils Information Centre.

 

Crushing soybeans produces soymeal for animal feed production and soyoil for cooking.

 

He said that although soymeal prices in Shandong province rose slightly in the past week, "trading was not active enough to send a strong positive signal to the whole market".

 

Meanwhile, the low prices of soybeans also prevented local farmers from selling much to the market, which prevented prices from falling too much, analysts said.

 

In Heilongjiang province, China's largest soybean-producing region, prices of average quality soybeans were little changed to be quoted around RMB2,420 a tonne on average.

 

Prices in Jilin, another major producing province in the northeast, were around RMB2,450-RMB2,500/tonne.

 

"The outlook (for feed) in spring is still uncertain for crushers, and an overall recovery of the industry still doesn't to be imminent," said Zhang.

 

"We can only wait and see how long the bird flu virus will be the concern for consumers when they choose what to eat, how soybean futures prices on the CBOT will change and how the local market will be impacted," he said.

 

Meanwhile, COFCO Futures Co estimates that about 2.3 million tonnes of soybeans will arrive in March.

 

China National Cereals, Oils and Foodstuffs Corp, a major grains trading company, holds a controlling stake in COFCO Futures Co.