China soy prices rise as fresh government stockpile buoys trade

 

 

Soy prices in China's major producing areas rose in the week to Friday (May 8), propelled on news last week that the government was boosting its soy stockpile.

 

Soybean prices in Jiamusi city in Heilongjiang, a key growing province, were around RMB3,260 a tonne, up from RMB3,140/tonne a week ago.

 

In Suihua, also in the same province, they were around RMB3,300/tonne, up slightly from RMB3,260/tonne a week ago.

 

Last week, the government offered to buy another 1.25 million tonnes of soy in major producing areas of the northeast by the end of June, adding to the build-up of 6 million tonnes it was already on the verge of completing since last year's harvest.

 

The offer price, at RMB3,700/tonne, props up farmers' income over lagging domestic cash prices.

 

"The biggest driver of the price increases this week is the news of the additional reserves," said Wang Shaoguang, of Galaxy Futures.

 

 

Soyoil prices were up in the week to Friday.

 

First-grade soyoil prices in Dongguan in Guangdong province were around RMB7,950/tonne, up from RMB7,300/tonne a week ago.

 

In Rizhao in Shandong province they were also around RMB7,850/tonne, up from RMB7,200/ton a week ago.

 

Soymeal prices in Dongguan were around RMB3,200/tonne, up from RMB2,980/tonne a week ago; in Rizhao they were around RMB3,200/tonne, up from RMB3,000/tonne a week ago.

 

Soymeal and soyoil depend heavily on imported soy, whereas domestic soy is used mostly for human consumption, Wang said.

 

Soyoil also rose in step with palm oil price increases, which was in turn influenced by tightness in Malaysian palm oil stocks, a major supplier, Wang said.