August 21, 2006

 

China's soybean prices rise on gains in soy futures

 

 

Soybean prices in China's major producing regions rose moderately in the week to Friday (Aug 18), supported by gains in the futures market and a recovery in feed demand.

 

In Heilongjiang, China's largest soybean-producing province, prices of average quality soybeans rose around RMB10 at the two main soybean trading centres.

 

In Harbin, the provincial capital, prices were quoted around RMB2,220-2,240 a tonne, while prices in the north-eastern part of the province were around RMB2,140-2,180/tonne.

 

Prices remained mostly unchanged around RMB2,340-2,360/tonne in Jilin province, another major soybean-producing area in China's northeast.

 

"Soybean futures gained considerably this week, providing support to prices on the spot market," said Zhang Liwei, an analyst at the China National Grain & Oils Information Centre.

 

"Soymeal prices increased by around RMB20/tonne on the spot market this week, which also helped soybean prices," Zhang added.

 

Imported soybeans have a substantial impact on prices of home-grown soybeans, according to analysts.

 

COFCO Futures Co said import arrivals of soybeans are expected to reach 670,000 tonnes in the first 10 days of August, with total arrivals hitting 2.3 million tonnes for the whole month.

 

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

 

Zhang said prices for imported soybeans will rise to around RMB2,600/tonne in September with a decline in the volume of arrivals.

 

"Demand for feed is expected to look up as livestock raisers are increasing production, in a rush to take advantage of increased prices for pork and poultry, " he added.

 

"Soybean prices will probably continue to rise next week as a recovery in consumption of feed pushes up demand for soymeal and soybeans," said Zhang.