September 14, 2007

China's soy prices expected to stay high

China's soy prices have stayed high this year and would remain so for the near term, according to a market monitoring report by the Chinese Ministry of Commerce (MOC) on Wednesday (Sep 12).

Wholesale soy price in the second half of August of RMB 3,423 per tonne (US$456) is up nearly 14 percent from the beginning of this year and up 20.2 percent over the same period last year, according to the MOC. 

Soy production started off at a low earlier this year due to a reduction in soy planting areas in major soy planting regions. The reduction was later exacerbated by serious droughts.

Soy production in Heilongjiang province, China's biggest soy-producing region, is expected to drop 10.3 percent this year. At the same time, a recovery in the pig population as pig diseases abate may signal more demand and higher prices for soy, a major ingredient in pig feed.