June 13, 2011

Soy prices in China were mixed in the week to Friday (Jun 10), with domestically produced soy purchase prices stabilising as traders stayed on the sidelines, while excess supply continued to weaken imported soy.

The average price in the top producing province of Heilongjiang, which accounts for about 40% of the country's output, was flat around RMB3,800-3,840 (US$586-592)/tonne, while import prices in major ports were about RMB3,920-3,960 (US$604-610)/tonne, down about RMB20-40 (US$3-6)/tonne.

Port inventories, which stand at more than six million tonnes, will continue to rise as traders appear to have overestimated the demand for soy and booked more cargoes than needed, experts said.

Soy imports in May also rose strongly, up 18% from April and up 4% on-year to 4.56 million tonnes.

Analysts said the oversupply may keep soy prices under pressure for a long while, despite reduced domestic soy acreage.

China's soy output this year is expected to drop 10% to 13.5 million tonnes due to the fall in acreage, the China Grain Reserves Corp-owned consultancy Chinese Grain Network said in a research note.