May 19, 2006

 

China's soy prices up

 

 

Soy prices in China's major producing regions continued to rise this week, with rising soyoil prices lending some support because of fewer imports, analysts said.

 

"Soyoil prices rose RMB40-RMB60 a tonne around the country in the week, so soy prices finally gained some momentum to rise," said Zhang Liwei, a soy analyst at the China National Grain & Oils Information Centre.

 

With soyoil import prices higher than local production, local soyoil prices were underpinned by the falling volume of imports, Zhang said.

 

Meanwhile, as farmers saw prices rising, they became more reluctant to sell in anticipation of higher prices, Zhang said, adding that they were also busy with spring farm work.

 

In Heilongjiang, China's largest soy-producing province, prices of average quality soy were up RMB40/tonne, to RMB2,260-RMB2,360/tonne.

 

In Jilin province, another major soy producing base in China's northeast, prices rose RMB20/tonne to RMB2,460-RMB2,500/tonne.

 

Rising soy prices have led to higher soymeal prices in some places, such as Heilongjiang province.

 

However, soymeal prices, with the slow recovery of feed demand, were little changed in most other places, especially in the coastal cities, pressured by large amount of imports.

 

"Soy prices were still under pressure because of a large amount of imports, although rising demand for local soyoil may alleviate the pressure," Wang said.

 

COFCO Futures Co said total arrivals in May would reach 2.8 million tonnes, which is still a lot of pressure on the market, given the 2.67-million-tonne of arrivals in April.

 

China National Cereals, Oils & Foodstuffs Corp, a major grains trading company, holds a controlling stake in COFCO Futures Co.