May 23, 2011

Northeast China's Heilongjiang province failed to sell out any of the 34,300 tonnes of soy it offered at an auction Friday (May 20), which marked the 14th failure of the provincial soy auction since domestic soy market softened from February.

The floor price at the auction was set at RMB3,750 (US$577)/tonne. Current soy purchase prices in the province stand at 3,780 (US$582)/tonne on average, down RMB30 (US$4.62)/tonne from a month earlier, while import prices at the port are RMB4,000-4,050 (US$615-623)/tonne, a slump of RMB100-150 (US$15-23)/tonne from the previous month.

Since December of last year, the province has offered 2.13 million tonnes of reserve soy at auctions, but only 225,800 tonnes or 10.57% were transacted.

Domestic oil processing mills continue to make losses in production and have heavy stock pressure. Meanwhile, spot prices of soy products maintain the weak correction.

According to the industry portal, losses for processing domestic soy is about RMB35 (US$5.39)/tonne, keeping unchanged with last week, while edible oil plants are able to make profit of RMB9 (US$1.39)/tonne for processing one tonne of imported soy, down RMB9 from a week earlier.

By May 10, Heilongjiang's soy crops planting had been completed by 62%. The portal predicted that the province's soy acreage will come to about 3.33 million hectares in 2011, lower than the 4.48 million hectares last year.

Heilongjiang is the largest soy production base in China, yielding about 40% of the country's total soy output.