October 13, 2006

 

China soy prices down slightly

 

 

Soy prices in China's major producing regions were slightly lower compared to two weeks ago on rising supply, and analysts expect prices to fall further in the coming weeks with the new harvest.

 

In Heilongjiang, China's largest soy producing province, prices of average quality soys were quoted around RMB2,200 a tonne on average, RMB100 lower from two weeks ago.

 

Prices in Jilin province, another major producing region in the north-east, were around RMB2,300-RMB2,400/tonne, RMB100 lower than two weeks ago.

 

Soy which were harvested last year still account for the majority on the market, although there has been an increasing amount from the new harvest, said traders.

 

New soys usually come to the market during late October and mid-November.

 

"Although domestic supply is rising, crushers may still prefer to use imports, which will weigh further on local soy prices," said Ren Hongxia, a trader at Jilin Grains Trading Centre.

 

Imported soy usually have higher oil content than locally grown ones.

 

"So after the harvest, with demand little changed, prices are likely fall further," Ren said.

 

China imported 1.79 million tonnes of soy in September, preliminary data provided by the customs department Thursday showed.

 

COFCO Futures Co's latest forecasts indicate that total arrivals in October will likely top 2 million tonnes again.

 

China National Cereals, Oils & Foodstuffs Corp., a major grains trading company, holds a controlling stake in COFCO Futures Co.

 

"Despite the ample supply, we estimate that demand will pick up at the year's end, as crushers prepare for the New Year's Day and the Spring Festival," said Wang Xiaohui, China National Grain and Oils Information Centre's analyst.

 

CNGOIC said earlier this week that it cut its forecast of China's soy output for 2006 to 15.5 million tonnes from its September forecast of 15.9 million tonnes.