China soy prices stable, supported by futures, policy

Soy prices in China's major producing areas were mostly stable in the week to Friday (November 27), as farmers were reluctant to sell in expectation of higher prices.

 

Soy prices in Harbin in Heilongjiang province were between RMB3,660 (US$535.98) to RMB3,720 (US$544.76) a tonne compared with RMB3,560 to RMB3,720/ton a week earlier.

 

In Jiamusi, in the same province, prices were around RMB3,600/tonne compared with RMB3,520-RMB3,640/tonne.

 

Local prices were supported by a surge in futures markets and the government's purchase policy.

 

China will start buying soy from northeast major producing areas Dec. 1 at RMB3,740/tonne, according to a statement published Thursday on a government-related Web site.

 

The price is higher than the RMB3,700/tonne the government offered for last year's crop.

 

Meanwhile, the government will also provide northeast crushers with subsidies for soy purchases at RMB160/tonne if the purchase prices are higher than those prevailing in the domestic market.

 

The purchase price was in line with market expectations and helped boost farmers' expectations for higher prices.

 

The subsidies will also boost crushers' interest in buying the crop, pushing prices up, said Heilongjiang Jiusan Oil & Fat Co. in a note on its Web site.

 

Soyoil prices jumped on rising futures and expectations of higher demand ahead of the year-end holidays.

 

First grade soyoil prices in Zhangjiagang in Jiangsu province were between RMB8,050 and RMB8,150/tonne, up from RMB7,600 and RMB7,800/tonne a week earlier.

 

First grade soyoil prices in Dongguan in Guangdong province were at RMB7,800-RMB8,150/tonne compared with RMB7,500-RMB7,700/tonne.

 

Soymeal prices were higher.

 

Soymeal prices in Jiangsu province were at RMB3,620-RMB3,720/tonne compared with RMB3,500-RMB3,660/tonne.

 

US$1 = RMB6.82 (Nov 27)