August 14, 2006

 

China's soybean prices rise as demand shows recovery signs

 

 

Soybean prices in China's major producing regions rose in the week to Friday (Aug 11) as demand showed signs of recovery.

 

In Heilongjiang, China's largest soybean-producing province, prices of average quality soybeans rose around RMB20-40 a tonne at two main trading centres.

 

In Harbin, the provincial capital, prices were quoted around RMB2,200-RMB2,260/tonne, while prices in the north-eastern part of the province were around RMB2,120-RMB2,180/tonne.

 

Prices also rose RMB20-40 to around RMB2,360-RMB2,420/tonne in Jilin province, another major soybean-producing area in China's north-east.

 

"Feed companies were seen more active in acquiring soymeal, their main raw material, as the livestock raising industry shows signs of recovery, with prices for pork and poultry picking up," said Zhang Liwei, an analyst at the China National Grain and Oils Information Centre.

 

"Local crushers increased purchases of soybeans, in a bid to enhance production to meet increasing demand for soymeal and soyoil, as witnessed in recent days," he added.

 

Imported soybeans put substantial pressure on prices of home grown soybeans as usual, according to analysts.

 

COFCO Futures Co said import arrivals of soybeans are expected to reach 2.3 million tonnes in August, up from 2.15 million tonnes in July.

 

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

 

However, Zhang estimated that imports arrivals would decline in August and September as prices of imported soybeans and freight costs rise.

 

"Imports arrivals will probably drop below 2 million tonnes in September," he said.

 

"Whether rises in soybean prices will continue depends on demand for feed and weather conditions," he added.