August 20, 2007

 

China soy prices up as soymeal demand up significantly

 

 

Soy prices in China' major producing regions continued to rise in the week to Friday, supported by reduced supply amid strongly recovering soymeal demand.

 

In Mudanjiang city in Heilongjiang province, China' largest soy growing region, prices of average-quality soys were around RMB3,240-RMB3,500 a tonne, up from RMB3,060-RMB3,220/tonne a week earlier.

 

Prices in Jiamusi City in the northeastern part of the province were at RMB3,240-RMB3,360/tonne compared with RMB3,020-RMB3,200/tonne.

 

Limited domestic soy stocks and surging freight fees have pushed imported soy prices to as high as RMB3,800/tonne, which has helped support domestic soy prices.

 

Soymeal demand has picked up significantly, and importers are more actively purchasing soy amid lower than expected imports for August and September, said the China National Grain and Oils Information Center.

 

Soy prices are likely to rise further amid rising soymeal prices and drought concerns, said grain information provider alibaba.com.

 

Soy oil prices were mostly stable at high levels on strong demand, but could be dragged down by tumbling soyoil futures.

 

In Shandong province, fourth-grade soyoil prices were around RMB8,700/tonne, compared with RMB8,500-RMB8,700/tonne in the previous week.

 

In southern Guangdong province, fourth-grade soyoil was at RMB8,450-RMB8,500/tonne compared with RMB8,400-RMB8,550/tonne last week.

 

In the eastern city of Dalian, fourth-grade soyoil was at RMB9,000-RMB9,100/tonne, compared with RMB8,900-RMB9,100/tonne a week earlier.

 

China' soyoil futures fell by the 4 percent limit during Friday' session, dragged lower by tumbling crude oil prices.

  

Soyoil cash prices could be pushed lower as a result, said Fang Xiangmin, research manager at Changjiang Futures.

 

Soymeal prices were higher on limited stocks and rising demand from the feedmeal sector.

 

In Jiangsu province, prices of average-protein soymeal were at RMB2,730-RMB2,800/tonne compared with RMB2,520-RMB2,700/tonne a week earlier.

 

In Guangdong province, prices of average-protein soymeal were at RMB2,650-RMB2,720/tonne, up from RMB2,500-RMB2,600/tonne.

 

However, CNGOIC expects soymeal demand to slow down in the coming weeks due to the recent surge in soymeal prices.