April 10, 2006

 

China soybean prices fall on losses in futures market

 

 

Soybean prices in China's major producing regions fell this week on a weaker futures market, with crushers still unwilling to buy, analysts said Friday (Apr 7).

 

In Heilongjiang province, China's largest soybean-producing region, prices of average quality soybeans mostly fell RMB20 to around RMB2,400 a tonne.

 

In some eastern and northern parts of the province, prices were as low as RMB2,300/tonne.

 

Meanwhile, prices in Jilin, another major producing province in the northeast, fell by RMB50 to RMB2,400-RMB2,450/tonne.

 

"CBOT and local futures prices continued to fall in the week, following the Mar 31 USDA report, so local physical prices fell accordingly," said Zhang Liwei, a soy analyst at the China National Grain and Oils Information Centre.

 

"More than half of the crushers, mostly small ones, have already stopped their operations...If they continue to operate, they'll be in debt," Zhang said.

 

He added that traders were also reluctant to buy, as they expect prices to fall further.

 

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

 

A small rise in soymeal consumption in some places could not reverse the overall trend of falling soybean prices, analysts said.

 

"The outlook for soybean price is not good, given the futures market, which lacks any motivation to rise," Zhang said.

 

Meanwhile, COFCO Futures Company's statistics indicated about 2.17 million tonnes of arrivals for March, slightly lower than its previous estimate of 2.3 million tonnes.

 

It estimates arrivals in April around 2.6 million tonnes, higher than the estimate for March.

 

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