December 02, 2003

 

 

China Soymeal Markets Edge Higher Past Week On Reduced Supplies

 

China's domestic soymeal prices mostly rose in the past week as negative crush margins forced more soybean processors to curb crushing operations, local traders in China said Tuesday.

 

As of Tuesday, prices of soymeal in eastern China were quoted around 2,540- 2,620 yuan ($1=CNY8.28) a metric ton, about CNY20 higher than prices last week, traders said.

 

In northern China, soymeal prices also gained about CNY20/ton in the past week. They were quoted around CNY2,600-CNY2,680/ton Tuesday.

 

Crush margins are roughly the difference between prices of products like oils and meals after crushing, and the cost of raw materials such as soybeans.

 

"This week, the soymeal markets made a minor rebound, supported by the reduction of supplies," a trader from China National Cereals, Oils & Foodstuffs Import & Export Corp., or Cofco, said.

 

Crush margins for imported soybeans were estimated to be at a negative CNY20-CNY30/ton this week, compared with a positive CNY1,000/ton in October. The negative margins led crushers to cut output.

 

Crush margins using locally produced soybeans were also sharply lower although still in positive territory around CNY60/ton this week, compared with CNY500-CNY600/ton in October.

 

"The poorer crush margins will curb the supply of soymeal and then pave a floor for the soymeal markets," another trader from a local soybean trading company in Heilongjiang said.

 

But many traders aren't expecting any major rally in soybean products, as the supply of raw materials is expected to be more than ample for the rest of 2003.

 

In November, 21 cargoes, or around 1.2 million metric tons, of imported soybeans arrived in China. In December, the number of imported soybean cargoes could even double, said traders.