China soy prices lower as government almost complete purchases

Soy prices in China's major producing areas were lower as the government has almost completed its purchases and farmers' expectations of higher prices have been damped.

 

Soy prices in Jiamusi in Heilongjiang, a major producing province, were around RMB3,240 a tonne, down from RMB3,320 the week before. Prices in Suihua in the same province were around RMB3,300/ton, falling from RMB3,360 a week ago.

 

With the government's buying programme winding down, demand is sluggish, so farmers have been more willing to sell their soy at low prices.

 

Farmers also need to cash in to prepare for the spring planting, and some still have half of their 2008 harvest on hands, said Chen Yangui, an official with the Qiqihar branch of China Soybean Industry Association.

 

Some processing plants restarted operations, but lower soymeal and soyoil prices also pushed soy prices lower by damping those plants' confidence about their profit margins, said analysts.

 

Soyoil prices were lower on weak demand.

 

First-grade soyoil in Lianyungang in Jiangsu province was around RMB6,650/tonne, down from RMB6,770-RMB6,780/tonne a week earlier.

 

In Dongguan in Guangdong province, it was around RMB6,650/tonne, compared with RMB6,650-RMB6,720/tonne the week before.

 

Soymeal prices were lower, pressured by high amounts of cheap imported soy and a decline in pig prices.

 

In Lianyungang, soymeal was around RMB3,170/tonne, down from RMB3,230-RMB3,250/tonne a week earlier, while in Dongguan, prices were around RMB3,150/tonne, compared with RMB3,220-RMB3,250/tonne a week earlier.

 

Analysts expected pig prices to fall further in the near term, which would continue to depress soymeal prices.