October 29, 2007

 

China soy prices up; supply shortage due to snowfall

 

 

Soy prices in China were higher in the week to Friday (October 26) due to supply shortage, a result of a heavy snowfall in major producing regions.

 

Soy prices in Heilongjiang province were mostly between RMB3,700 to RMB3,800 a tonne, up RMB40 to RMB60/tonne from a week earlier.

 

Soyoil processing companies and traders raised soy purchase prices to attract more volume, as snowfall in the northeastern part of Heilongjiang province blocked soy transportation.

 

Despite concerns about the government's tightening monetary polices aimed at curbing high inflation, rising soymeal and soyoil prices have supported soy prices.

 

The downstream sectors, including the feedmeal sector, can accept rising soy prices due to the high meat prices this year, said Pei Yong, research manager at Chinatex Grains & Oils Import & Export Corp.

 

Soyoil prices were higher on expectations of increasing demand, because the demand for palm oil will be dwindling as the weather turns cold.

 

In Shandong province, fourth-grade soyoil prices were at RMB8,900 to RMB9,000/tonne, higher than RMB8,730 to RMB8,850/tonne the previous week.

 

In southern Guangdong province, fourth-grade soyoil was around RMB8,750 to RMB8,800/tonne, higher than RMB8,700/tonne a week ago.

 

In the eastern city of Dalian, fourth-grade soyoil was up at RMB9,000-RMB9,100/tonne from RMB8,900 to RMB9,000/ton a week earlier.

 

Rising soyoil futures prices also helped to support soyoil cash prices, said traders.

 

Soymeal prices were higher on high soy prices.

 

Tight domestic soy supply and rising imported soy prices, partly due to surging freight fees, along with recovering demand from the feedmeal sector, will help to support soymeal prices at high levels in the coming weeks, said China National Grain and Oils Information Centre in its weekly report.

 

In Jiangsu province, prices of average-protein soymeal were at RMB3,420 to RMB3,440/tonne, slightly higher than RMB3,350 to RMB3,420/tonne a week earlier.

 

In Guangdong province, prices of average-protein soymeal were at RMB3,370 to RMB3,430/tonne, compared with RMB3,350 to RMB3,380/tonne.