July 17, 2006

 

China soybean prices lower amid persistent weak demand

 

 

Soybean prices in China's major producing regions continued to fall in the past week as sluggish demand persisted.

 

Demand remained weak while supply was still abundant, said an analyst.

 

In Heilongjiang, China's largest soybean-producing province, prices of average quality soybeans fell by RMB20-RMB40 in two main soybean trading centres.

 

In Harbin, the provincial capital, prices were quoted around RMB2,260-RMB2,280 a tonne, while those in the north-eastern part of the province were around RMB2,140-RMB2,200/tonne.

 

Prices were largely unchanged around RMB2,420-RMB2,440/tonne in Jilin province, another major soybean-producing area in China's northeast.

 

"Trading was relatively quiet, with demand mostly from local crushers in soybean producing regions," said Zhang Liwei, an analyst at the China National Grain and Oils Information Centre.

 

"Farmers still hold around 10 percent-15 percent of the crop in stocks, but are reluctant to sell at too low prices, he added.

 

"A large volume of import arrivals in May and June were also weighing on soybean prices," said Zhang.

 

COFCO Futures Co said total import arrivals of soybeans reached 350,000 tonnes in the first 10 days of July, with arrivals expected to total 2.3 million to 2.4 million tonnes for the entire month, compared with 3.67 million tonnes in June.

 

China National Cereals, Oils and Foodstuffs Corp, a major grain trading company, holds a controlling stake in COFCO Futures Co.

 

China's soybean imports totalled 14.06 million tonnes in the first half of 2006, up from 12.01 million tonnes in the same period last year, according to customs statistics.

 

Soybean prices will probably hold at the current level with small fluctuations as supply and demand have reached a kind of balance, Zhang said.