China soy prices flat as market waits for policy cues

 

 

Soy prices in China's major producing areas were flat in the week to Friday as traders stayed on the sidelines, expecting government policy changes that they hope would support prices.

 

Soy prices in Jiamusi city in Heilongjiang, a major producing province, were around RMB3,540 (US$517.93) a tonne, flat from a week ago.

 

In Suihua, also in the same province, they were around RMB3,560/tonne, unchanged from a week ago.

 

"There's no clear direction for soy cash prices," said Li Xiaoli, a soy analyst with Beite Futures. "Mainly, people are waiting to see what new policies the government might come up with."

 

The market approved of Beijing's removal of export taxes on soys earlier this week, but the move was largely cosmetic since China's soy export volumes are relatively small.

 

But farmers and traders hope more import policies are in the works that would limit foreign competition.

 

Market participants have mostly factored in pressure from rising imports, expected to reach a record 4.3 million tonnes in June. The average monthly import volume for the first five months of 2009 was 3.5 million tonnes, while the average for last year was 3.1 million tonnes.

 

Soyoil prices fell in the week to Friday.

 

First-grade soyoil prices in Dongguan in Guangdong province were around RMB7,300/tonne compared with RMB7,600/tonne a week ago.

 

In Rizhao in Shandong province they were around RMB7,250/tonne, down from RMB7,500/tonne a week ago.

 

Soymeal prices were also lower.

 

Soymeal prices in Dongguan were around RMB3,420/tonne, down from RMB3,520/tonne a week ago; in Rizhao they were around RMB3,330/tonne, down from RMB3,380/tonne a week ago.

 

US$1 = RMB6.83 (June 26, 2009)