November 26, 2007

 

China soy prices mixed; supply boost hopes delay buying
 

 

Soy prices in China were mixed in the week to Friday (November 23, 2007), with farmers reluctant to sell but some processing plants suspending purchases on expectations market supplies will increase.

 

Soy prices in Jiamusi city in Heilongjiang province, a major soy producing region, were between RMB4,220-RMB4,240 a tonne, compared with RMB4,160-RMB4,240 a week ago.

 

Soy prices in Jixian county in Heilongjiang province were at RMB4,160-RMB4,240/tonne, compared with RMB4,120-RMB4,200/tonne the previous week.

 

Traders and analysts believe the government may be planning to import 1 million tonnes of soyoil and 1.5 million to 2 million tonnes of soy - exempt of the 13 percent value-added tax - for its state reserves by year end.

 

The speculation couldn't be confirmed, but the possibility that the soys could enter the market in the future has kept traders on the sidelines, with big plants in Harbin suspending purchases.

 

Chinese soy imports have lifted prices at the Chicago Board of Trade, further curbing import interest from private importers, said the China National Grain and Oils Information Center.

 

Some farmers are continuing to hold back on sales on expectations prices will rise further.

 

Soyoil prices were higher on strong demand expectations.

 

In Shandong province, the price of fourth-grade soyoil was at RMB10,270-RMB10,320/tonne, up from RMB9,750-RMB10,220/tonne the previous week.

 

In southern Guangdong province, fourth-grade soyoil was around RMB9,950-RMB10,000/tonne, higher than RMB9,650-RMB9,900/tonne a week ago.

 

Analysts said soyoil prices will be supported at record highs due to reduced global oilseed output and strong international crude oil prices.

 

In November and December, China will likely import 400,000-500,000 tonnes of soyoil and around 400,000 tonnes of palm oil each month, said an official at a foreign trading house in Shanghai.

 

So far this year, China's monthly soyoil imports totaled 200,000-300,000 tonnes in most months.

 

Soymeal prices were higher on dwindling stocks at feedmeal companies and traders.

 

But rising soymeal prices have curbed demand, as feedmeal plants didn't purchase in large volume.

 

In Jiangsu province, prices of average-protein soymeal were around RMB3,800, up from RMB3,650-RMB3,750/tonne a week earlier.

 

In Guangdong province, prices of average-protein soymeal were at RMB3,700-RMB3,750/tonne, compared with RMB3,650-RMB3,750/tonne.

 

RMB1 = US$0.1351 (As of November 26, 2007)