June 1, 2004

China's Largest Crusher Won't Join Soymeal Price Alliance

Eastern Ocean Grain and Oil Industry Co. Ltd., the largest soybean crusher in China, will continue to sell soymeal below market prices, the company said in a statement posted on its Web site.
 
"East Ocean Company will not participate in the effort of crushers to stabilize soymeal prices at 2,900 yuan ($1=CNY 8.28) a metric ton, based on our own situation," said the notice from the company, based in Zhangjiagang, Jiangsu province, eastern China.
 
As reported earlier, some of China's leading soybean crushers met in Beijing Saturday and agreed to not sell soymeal below CNY2,900/ton after prices last week fell to this year's lowest level.
 
"East Ocean will continue to sell soymeal under market prices based on our own situation, and would further lower the soymeal quotes for August and September delivery," added the notice.
 
The crusher had lowered the ex-factory prices of soymeal, 44% protein, to CNY2,750/ton Thursday, sharply lower than a price of CNY3,100/ton Wednesday, traders said.
 
"Before that, East Ocean has been holding the prices above CNY3,000/ton, while most other crushers lowered prices below that level to attract demand from end users," said a trader from a Hong Kong-based oilseeds company Monday.
 
The sudden and sharp revision in soymeal prices by East Ocean late last week attracted immediate protest from other crushers, said the trader.
 
In the meeting on May 29, which was not attended by representatives of East Ocean, crushers agreed to a set a floor price of CNY2,900/ton for soymeal, said the trader.