September 3, 2007

 

China stable soy prices supported by strong soymeal demand

 

 

Soybean prices in China's major producing regions were mostly stable in the week to Friday (August 31), supported by increasing demand for soymeal and limited domestic stocks of soybean.

 

In Baoqing, Heilongjiang province, China's largest soybean-growing region, prices of average-quality soybeans were around RMB3,340 to RMB3,360 a tonne, compared with RMB3,200 to RMB3,340/tonne a week earlier.

 

Prices in Jiamusi City in the northeastern part of the province were between RMB3,300 to RMB3,400/tonne, compared with around RMB3,400/tonne a week ago.

 

Demand for soymeal has been increasing as farmers want to sell their pigs ahead of the Mid-Autumn Festival and National Day holiday starting late September, on fears of a fall in pork prices after the holidays.

 

"The demand for better-quality soymeal is strong as farmers are eager to shorten the breeding period (for pigs)," said Shanghai JCI, a consultancy firm.

 

Pork prices have been falling for the third week in a row amid increased domestic supply and reduced demand due to high prices, with prices falling 6 percent as of August 24 from early August levels, according to data from the Ministry of Commerce.

 

Meanwhile, as China strengthened checks on imported soybeans due to a food safety dispute with the US, the discharging of soy imports at Chinese ports has been delayed.

 

Earlier, there were rumours that the discharging of soybeans at Chinese ports had been suspended, but these were later proven to be untrue.

 

However, there will be some early soybeans coming to the market in 10 days, which may help to limit a rise in prices, said analysts.

 

Soyoil prices are continuing to fall on increasing soyoil imports, and will likely fall further on oversupply, the China National Grain and Oils Information Centre said in its weekly report.

 

In Shandong province, fourth-grade soyoil prices were around RMB8,450 to RMB8,500/tonne, lower than around RMB8,600/tonne the previous week.

 

In southern Guangdong province, fourth-grade soyoil was at RMB8,200 to RMB8,250/tonne compared with RMB8,400 to RMB8,500/tonne a week ago.

 

In the eastern city of Dalian, fourth-grade soyoil was down at RMB8,650/tonne from RMB8,800 to RMB9,000/tonne a week earlier.

 

Soymeal prices were higher on a recovery in demand from the feedmeal sector.

 

In Jiangsu province, prices of average-protein soymeal were at RMB2,840 to RMB2,960/tonne, higher than RMB2,750 to RMB2,850/tonne a week earlier.

 

In Guangdong province, prices of average-protein soymeal were at RMB2,800-RMB2,950/tonne, up from RMB2,680 to RMB2,800/tonne.