September 17, 2007

Sixty percent of China's soy area may cut yield by 2.825 million tonnes

About 60 percent of China's soy acreage will likely see an output cut of 2.82 million tonnes this year due to a drought and acreage reduction, according to officials and analysts attending a just-concluded grain conference.

Soy output in six major soy producing provinces, including Heilongjiang, Jilin, Inner Mongolia, Liaoning, Shandong and Henan provinces, may total 9.07 million tonnes in 2007, they said during the two-day 2007 China Autumn Grain and Oils Market Analysis Conference.

Of that amount, soy output in Heilongjiang province, China's largest soy-producing region, may decline by 31 percent to 5.54 million tonnes, said Liu Peng, information manager at local Longma Consultancy Co.

Agricultural officials from the other five provinces expected a total soy output reduction of 314,000 tonnes to 3.53 million tonnes.

Earlier this month, China National Grain and Oils Information Centre, a government think tank, cut China's total soy output forecast for 2007 to 14.4 million tonnes, down from 15.97 million tonnes in 2006.

Liu said overall soy prices in 2008 will be significantly higher than this year due to the reduced supply, increasing demand and high imported prices, with average domestic soy prices likely stay at US$453 to US$466 a tonne.

Average soy purchase prices this week were at RMB,262 a tonne, the highest level so far this year, according to data from the Ministry of Commerce.