April 14, 2006
China soybean prices continue to fall; Imports Cheaper
Soybean prices in China's major producing regions continued to fall this week, pressured by prospective cheaper imports and thin local demand, analysts said Friday (Apr 14).
In Heilongjiang province, China's largest soybean-producing region, prices of average quality soybeans mostly fell RMB40-RMB60 to around RMB2,360 a tonne.
In some eastern and northern parts of the province, prices were as low as RMB2,240-RMB2,260/tonne.
Meanwhile, prices in Jilin, another major producing province in the north-east, were at RMB2,360-RMB2,400/tonne, down RMB40-RMB50 from a week ago.
"Most crushers in the two provinces have stopped operations," said Zhang Liwei, a soy analyst at the China National Grain & Oils Information Centre.
As soymeal prices were only around RMB2,000/tonne and demand remained very low, crushers did not see a need to maintain operations, especially since crushing was unprofitable, Zhang said.
Crushing soybeans produces soymeal for animal feed production and soyoil for cooking.
"Consequently, crushers bought very little...trading was very quiet," he said.
Meanwhile, farmers were not keen to sell, as prices have fallen below their psychological bottomline.
Weak CBOT soy futures are expected to result in even lower physical prices on the local market, analysts said.
Soy imports due to arrive in May are priced only around RMB2,300/tonne, according to Zhang.
"We expect (local soybean prices) to fall further," as prices of imports are usually around RMB100-RMB150 higher than local soybean prices, he said.
If prices do not pick up at the end of the month, we will have to wait until June, analysts said.
Cofco Futures Co's latest statistics indicated that arrivals in the first 10 days of April totaled around 930,000 tonnes and maintained estimated arrivals at 2.6 million-2.7 million tonnes in April.
China National Cereals, Oils & Foodstuffs Corp, a major grains trading company, holds a controlling stake in Cofco Futures Co.
