October 15, 2007

 

China soy prices up; crushers keen to buy on less output

 

 

Soy prices in China's major producing regions rose sharply in the past two weeks, as crushers were keen to buy in anticipation of lower output this year, while farmers were reluctant to sell.

 

In Harbin, the provincial capital of Heilongjiang province, China's largest soy growing region, prices of average quality soy rose sharply to around RMB3,780 a tonne from RMB3,640/tonne before the holiday.

 

"We estimate a 10 percent decline of soy output this year," said Bao Jing, a soy analyst with Shanghai JC Intelligence Co., an agricultural commodities information provider.

 

"The expectation has triggered aggressive buying by crushers, while farmers, hoping for even higher prices later on, were reluctant to sell," Bao said.

 

Prices in Jilin province, another major producing region in the northeast, rose slightly to RMB3,840 to RMB3,890 from RMB3,800/tonne on September 28.

 

Meanwhile, China's soy imports in September fell to 1.89 million tonnes from 2.93 million tonnes in August, data provided by the customs department showed Friday (October 12).

 

"What we have seen is that small crushers became very worried that they might not be able to get enough soy for crushing later, which drove up prices," Bao said.

 

Soymeal and soyoil prices also increased, along with soy prices.

 

In Shandong province, first-grade soyoil prices were around RMB9,100/tonne, up from RMB9,000/tonne before the National Day holidays.

 

"We're very optimistic about the price outlook of soyoil. With ocean freight rates remaining high, the high cost of soy imports means soyoil prices are well underpinned," said Li Honglei, an analyst with Nanhua Futures Co.

 

Domestic crushers prefer to use imported soy to crush for soyoil, as imports contain more oil.

 

In Guangdong province, a major feedmeal consumption region in the south, soymeal prices were slightly up to RMB3,300  to RMB3,360/tonne from RMB3,300/tonne.