China soy prices down as crushers get government subsidies

 

 

China soy prices in major producing areas were lower in the week to Friday, as government subsidies for crushers damped their interest in local supplies.

 

Soy prices in Shangzhi, in the largest-producing Heilongjiang province, were around RMB3,600-RMB3,640 a tonne, down RMB20-RMB40/ton from a week earlier.

 

Processing plants in the northeast were unwilling to purchase farmers soy as the government has offered them a subsidy of RMB210/tonne to buying reserve stocks.

 

The government will provide subsidies to soy crushers in the north and northeast for 1.95 million tonnes of soy, with 1.5 million tonnes assigned to Heilongjiang crushers, analysts said.

 

Meanwhile, farmers were reluctant to sell their soy as they expect prices to rise once the government issues details of its plan to buy the new crop. Trading was very light.

 

Soyoil prices were higher, as demand is increasing with the approach of winter.

 

The government implementation of quarantine rules for canola imports are also likely to boost the demand for soyoil as a substitute, Jiusan Oil and Fat Co. said in a note published on its Web site.

 

China announced a "transitional measure" that requires all China-bound canola shipments imports to be tested before leaving the exporting country for blackleg--a fungal disease that affects crop yields--starting November 15. Canola is a low-erucic-acid variety of rapeseed.

 

First grade soyoil prices in Rizhao, in Shandong province, were around RMB7,480/tonne, up from RMB7,300-RMB7,350/tonne last week.

 

They were RMB7,220-RMB7,260/tonne in Guangzhou in Guangdong province, compared with RMB7,250/tonne.

 

Soymeal prices were lower amid expectations of rising imported soy arrivals in coming months.

 

Soymeal prices in Lianyungang in Jiangsu province were RMB3,520-RMB3,560/tonne, down from RMB3,600-RMB3,650/tonne.

 

US$1 = RMB6.82628 (Nov 13)