September 24, 2007

 

China soy prices up on worries over lower output

 

 

Soy prices in China's major producing regions were higher in the week to Friday (September 21) on increasing concerns over possible further reduced output this year.

 

In Harbin, the provincial capital of Heilongjiang province, China's largest soy producing region, the enter-factory prices of domestic soy were at RMB3,440 to RMB3,540 a tonne, up from RMB3,340 to RMB3,400/tonne a week earlier.

 

Concerns about frost in the major producing regions in the northeast have exacerbated concerns over output this year, said Li Honglei, an analyst with Nanhua Futures Co.

 

Besides frost concerns, about 60 percent of China's soy acreage will likely see an output decline totalling around 2.82 million tonnes this year due to a worst-ever drought, according to local government officials and analysts.

 

Liu Peng, information manager at local Longma Consultancy Co., said China's overall soy prices in 2008 will be significantly higher than this year due to reduced supply, increasing demand and high import prices, with average domestic prices likely at RMB3,400 to RMB3,500/tonne.

 

Soyoil prices were higher due to rising international soyoil prices.

 

In Shandong province, fourth-grade soyoil prices were around RMB8,600 tp RMB8,700/tonne, higher than RMB8,450 to RMB8,600/tonne the previous week.

 

In southern Guangdong province, fourth-grade soyoil was at RMB8,450 to RMB8,500/tonne compared with RMB8,300 to RMB8,400/tonne a week ago.

 

However, in the eastern city of Dalian, fourth-grade soyoil was down at RMB8,500/tonne from RMB8,600 to RMB8,700/tonne a week earlier.

 

Demand for soyoil hasn't picked up significantly as most companies have completed purchases ahead of holidays that start late September, the China National Grain and Oils Information Centre said in its weekly report, adding that there will be limited upside for soyoil prices.

 

Soymeal prices were also higher on higher soy prices.

 

In Jiangsu province, prices of average-protein soymeal were at RMB3,230 to RMB3,360/tonne, higher than RMB3,100 to RMB3,180/tonne a week earlier.

 

In Guangdong province, prices of average-protein soymeal were at RMB3,300 to RMB3,400/tonne, up from RMB3,130 to RMB3,150/tonne.