August 28, 2006

 

China soybean prices higher, supported by soymeal

 

 

Soybean prices in China's major producing regions rose considerably in the week to Friday (Aug 25), supported by higher soymeal prices, analysts said.

 

In Heilongjiang, China's largest soybean-producing province, prices of average quality soybeans rose around RMB100 at the two main soybean trading centres.

 

In Harbin, the provincial capital, prices were quoted around RMB2,340-RMB2,360 a tonne, while prices in the north-eastern part of the province were around RMB2,200-2,260/tonne.

 

Prices were quoted around RMB2,380-2,400/tonne in Jilin province, another major soybean-producing area in China's northeast, up around RMB40 from last week.

 

"Soybean prices posted a strong rebound this week, in step with gains in soymeal prices," said Zhang Liwei, an analyst at the China National Grain & Oils Information Centre.

 

Zeng Xuezhou, an analyst at Beite Futures Co, agreed with Zhang, saying farmers in soybean producing regions were active in selling their stocks, in a rush to take advantage of the higher prices.

 

"Trading volume jumped as well, as local crushing companies made large purchases as part of efforts to increase production to meet growing demand," 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 were expected to reach 1.48 million tonnes in the first 20 days of August, with arrivals over 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.

 

Import arrivals have shown a trend of declining, according to Zhang.

 

"Import arrivals in September will be less than 2 million tonnes," Zhang said.

 

"Soybean prices will continue to pick up in the near future, supported by rises in both demand and imported soybean prices," Zhang added.

 

Zeng was not so bullish on the soybean market compared with Zhang.

 

"Whether prices will rebound firmly depends on the new harvest of soybeans in the fall," he said.