April 14, 2004

Chinese Crushers Lower Soymeal Prices On Poor Demand

Major Chinese soybean crushers have lowered the ex-factory prices of soymeal amid slowing demand from feedstuff producers, traders in China said Tuesday.
 
Soymeal prices quoted by large crushers in Jiangsu, eastern China, have fallen to RMB3,520 ($1=RMB8.277) a metric ton, traders said, compared with RMB3,700/ton two weeks ago.
 
Crushers in Shandong province have lowered their prices to RMB 3,400/ton, down RMB100-120/ton from prices two weeks ago, added traders.
 
Talk that South American soybean cargoes will start reaching Chinese ports by late April contributed to the pressure on prices, traders said.
 
China's soybean and soymeal markets soared in March, partly on concerns that soybean importers may not be able to get new permits to unload imported cargoes by the time the current permits expire April 20.
 
"There might be no shortage of soybeans in late April, if crushers could get the import licenses from quarantine authorities by late April," a market analysts from a local brokerage house said Tuesday.
 
While market participants are expecting the new permits to be issued in time so as not to disrupt soybean imports, China's State Administration of Quality Supervision, Inspection and Quarantine hasn't said if the new permits will be available in April itself.
 
However, crushers have been forced to lower soymeal prices as end users, less worried about a supply disruption now, are holding out for lower prices, traders and analysts said Tuesday.
 
"Chicago Board of Trade soybean prices (fell) after the USDA supply and demand report," said a trader from a local soybean crusher in Jiangsu, adding that has damped sentiment in the domestic market as well.
 
Pressure from accumulating soymeal stocks with most crushers is adding to the bearish sentiment, he said.
 
"More end users have now turned to increase the usage of other protein meals such as peanut meal in the feed component, to replace the usage of high-priced soymeal," he said.