April 11, 2011

Soy prices in China's major producing areas and ports were stable in the week to Friday (Apr 8), supported by the government's purchase programme despite high soymeal stocks with crushers and a state-mandated cap on soyoil prices.

However, trade was sluggish as some crushers have suspended operations due to low margins.

Prices in northeastern China's Heilongjiang province, the nation's top producer, were around RMB3,800 (US$581)/tonne, unchanged from a week earlier, while import prices were around RMB4,200 (US$642)/tonne in major ports, also flat.

As of March 31, China National Grain Reserves Corp has bought from farmers about 2.6 million tonnes of soy harvested last year, and this underpinned prices, according to the Chinese Grain Network, a consultancy owned by the state stockpiler.

Stocks at major ports as of Friday were 6.1 million tonnes, up about 219,000 tonnes from a week earlier, as crushers' demand has slowed due to poor margins, it added.

"Domestic soy prices are expected to remain stable next week. In the near term, we can't see significant increase in demand. Given the reduced acreage in the US and China, we keep the positive long-term outlook for soy prices," the consultancy added.

The National Development and Reform Commission rejected applications by Cofco Group and Yihai Kerry Investment Co, China's top two edible oil makers, to raise edible oil prices, directing them to keep prices stable for the next two months, analysts said.