September 4, 2006
China soybean prices stable as demand strengthens
Soybean prices in China's major producing regions held stable in the week to Friday (Sep 1), supported by higher demand from feed and crushing companies, analysts said.
In Heilongjiang, China's largest soybean-producing province, prices of average quality soybeans were mostly unchanged at the two main soybean trading centres.
In Harbin, the provincial capital, prices were quoted around RMB2,340-2,360 a tonne, while prices in the north-eastern part of the province were around RMB2,200/tonne.
Prices were quoted around RMB2,380-2,400/tonne in Jilin province, another major soybean-producing region in China's northeast, almost the same from last week.
"Crushing companies in the northeast purchased more soybeans this week, in a rush to increase production to take advantage of the recovery in prices for soymeal and soyoil," said Zhang Liwei, an analyst at China National Grain & Oils Information Centre.
Liu Xinhua, an analyst at Great Wall Futures Company, concurred, adding "in northern provinces, such as Shandong and Hebei, demand for feed also saw steady growth, thanks to increases in prices for pork and poultry".
Imported soybeans have a substantial impact on prices of domestically-grown soybeans, analysts said.
Soybean imports in August would probably exceed 2.3 million tonnes, COFCO Futures Company forecast.
China National Cereals, Oils & Foodstuffs Corp, a major grain-trading company, holds a controlling stake in COFCO Futures Co.
Prices for imported soybeans aren't expected to rise in the coming weeks, according to Zhang.
"Increases in freight costs have offset losses in prices on the US market," Zhang said.
"Soybean prices will hold firm at the current levels, with small increases in some regions," Zhang added.
However, Liu wasn't so optimistic about the soybean market.
"Soybean prices will not be able to post a strong rebound in September, as the new harvest is already on the horizon," he said.
