September 25, 2006

 

China's soybean prices stable amid thin trade

 

 

Soybean prices in China's major producing regions were largely unchanged in the week to Friday (Sep 22), as buying demand was thin because of maintenance at crushers, while domestic harvesting was delayed by inclement weather, 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 RMB2,220-2,260/tonne.

 

Prices were quoted around RMB2,400/tonne in Jilin province, another major soybean producing area in China's northeast, little changed from last week.

 

"Local crushing companies reduced production for inspections and repairs and made almost no purchases," said Zhang Liwei, an analyst at the China National Grain and Oils Information Centre.

 

"New harvest of soybeans has been delayed by around 10 days, due to early frosts and low temperature conditions witnessed in producing regions lately," he added.

 

"Early harvesting has started in some areas. The quality of soybeans harvested so far is not good," said Zhang.

 

Imported soybeans have had a substantial impact on prices of domestically grown soybeans, analysts said.

 

COFCO Futures Company said soybean imports are expected to total around 1.7-1.8 million tonnes in September, compared with more than 3 million tonnes imported in August, according to Chinese Customs.

 

China National Cereals, Oils and Foodstuffs Corp, a major grain-trading company, holds a controlling stake in COFCO Futures.

 

Zhang expects soybean imports to rebound in October.

 

"The volume of import arrivals will exceed 2 million tonnes next month," he said.

 

But Tian Lianfeng, an analyst at Tianma Futures Co, said there remains an abundant supply of imported soybeans.

 

"The volume of (soybean) import arrivals still stockpiled at major ports is around 3 million tonnes," Tian said.

 

Soybean prices will hold stable next week, as both demand and supply are in balance, analysts said.

 

"Soybean prices will not fluctuate too much in the coming weeks as crushing companies would not build up stocks until the new harvest arrives on the market," Zhang said.

 

"Farmers still hold around 10-20 percent from the last crop, and are reluctant to sell at this time, as they believe prices will pick up later this year," said Gao Yanrong, an analyst at Dalu Futures Co.