May 26, 2009

China's demand for imported soy remained low last week following the surge of Chicago Board of Trade (CBOT) soy prices to a new eight-month high, making import expensive, according to a survey by China National Grain and Oils Information Centre (CNGOIC).

Furthermore, a rise in freight cost had caused imported soy prices to reach more than RMB4,000 (US$585.8) per tonne, which was higher than the domestic crop for the first time this year, the centre said in a report.

The centre added that trading firms and crushers were more reluctant to book cargoes and imports in coming weeks are likely to reduce partly due to ample supplies in China.

Meanwhile, the soyoil market was expecting some end-users to boost their inventories, which was likely to increase demand for the edible oil. However, some companies said that large imports of soy and soyoil would boost supply in the market and any rise of soyoil prices was expected to cut into demand.

The soymeal market stayed bearish as the surplus in supply heaped downward pressure on prices. However, the higher cost of soy imports could support meal prices and spur demand, though that was likely to stay below normal.