July 31, 2006

 

China's soybean prices continue to fall amid thin trade

 

 

Soybean prices in China's major producing regions continued to fall in the week to Friday (Jul 28), with trading volume declining on limited supply.

 

Soybean prices were also pressured by losses on the Dalian Commodity Exchange, an analyst said.

 

In Heilongjiang, China's largest soybean-producing province, prices of average quality soybeans slipped RMB20-RMB30 at the two main soybean trading centres.

 

In Harbin, the provincial capital, prices were quoted around RMB2,200-RMB2,220 a tonne, while prices in the north-eastern part of the province were around RMB2,100-RMB2,140/tonne.

 

Prices fell RMB20 to around RMB2,340-RMB2,380/tonne in Jilin province, another major soybean-producing area in China's northeast.

 

"Demand for soybean remains sluggish as crushers are not buying because prices of soymeal are low and demand is largely from local soybean food companies," said Zhang Liwei, an analyst at the China National Grain and Oils Information Centre.

 

"Farmers remain overstocked, but they will lose money if they release stocks and prices fall further. They would rather withhold stocks, as they expect prices to pick up later this year," he added.

 

COFCO Futures Co said import arrivals of soybeans totalled 1.38 million tonnes in the first 20 days of July.

 

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

 

Soybean imports are expected to total around 2 million tonnes in July, Zhang said.

 

"Soybean prices will probably hold at the current level, with small fluctuations expected in August," he added.