July 19, 2010

China's soy prices down on falling demand

Soy prices in China's major producing areas were lower in the week to Friday (Jul 16), as most processors in the northeast stopped buying the local crop.

Soy prices in Jiamusi, in the major producing province of Heilongjiang, were around RMB3,240-3,420 (US$478-$504) a tonne, down from RMB3,300-3,420 (US$487-$504) a week ago.

Competition from low-priced imported soy and slow consumption of domestic stocks have been eating away at the profits of processors which use domestically-grown soy.

As a result, soy planting areas in the northeast major producing areas fell by more than 10% this year, the China Oil Network said.

Soyoil prices were higher, along with a rise in the futures market.

Fourth-grade soyoil prices in Rizhao, Shandong province, were around RMB7,000 (US$1,033)/tonne compared with RMB6,900 (US$1,018)/tonne last week.

Soymeal prices were also higher in line with the futures market.

Prices in Jiamusi in Heilongjiang province were around RMB2,950 (US$435)/tonne, up from RMB2,860 (US$492)/tonne a week ago.

But analysts said the high amount of soy imports as well as high level of local soymeal stocks will pressure prices later.