Low procurement interest weighs on China's soy prices

Soy prices in major producing areas of China were lower in the week to Friday (Apr 23) as processors and traders were cautious about buying due to low profits.

Prices in Jiamusi, Heilongjiang province, were around RMB3,600-RMB3,740 (US$527-US$548) a  tonne compared with RMB3,640-RMB3,740/tonne (US$533-US$548) a week ago.

Prices were at RMB3,640-RMB3,760/tonne (US$533-US$551) in Suihua in the same province, lower than RMB3,700-RMB3,760/tonne (US$542-US$551) a week earlier.

Competition from cheaper imported soy has eaten away at the profits of processors who use domestic soy, said analysts. China imported 11.04 million tonnes of soy in the first quarter, up 8.7% from a year earlier, according to data from the General Administration of Customs.

Soyoil prices consolidated slightly, and the increasing volume of cheap soy imports will plague soyoil prices, said analysts.

Fourth grade soyoil prices in Heilongjiang province were at RMB7,650-RMB7,700/tonne (US$1,120-US$1,128), unchanged from a week ago. Fourth grade soyoil prices around the Bohai area were at RMB7,350-RMB7,450/tonne (US$1077-US$1091), down RMB50/tonne (US$7.3).

Soymeal prices were mostly higher, with an increased trading volume as the government's purchases of frozen pork helped the hog market recover, boosting expectations for better soymeal demand, said the China National Grain and Oils Information Centre in a note.

Soymeal prices in Dalian were around RMB3,070/tonne (US$450), up from RMB3,000-RMB3,050/tonne (US$439-US$447) a week ago. They were at RMB3,020-RMB3,050/tonne (US$442-US$447) in Guangdong province compared with RMB3,010-RMB3,020/tonne (US$441-US$442) last week.