December 10, 2007

China soy prices little changed; farmers reluctant to sell

Soy prices in China's major producing regions were little changed in the week to Friday (December 7, 2007) on concerns over the government's determination to tame record high grains prices.

Analysts said farmers are reluctant to sell on expectations of higher prices due to strong demand ahead of the year-end, so a sharp slide isn't very likely, despite rising imports.

In Heilongjiang province, China's largest soy growing region, prices of average quality soys were around RMB4,150-RMB4,300 a  tonne, little changed from a week earlier.

"Soymeal and soyoil prices fell a bit this week, which capped soy prices, but I don't see the possibility of a significant slide in the coming weeks," said an analyst at a government-backed think tank.

Although rising imports have put pressure on domestic cash values, the strong year-end demand for soy will lend support to prices, analysts said.

Soy soymeal and soyoil.

High feedmeal and vegetable oil prices have helped drive the country's consumer price index to an 11-year high.

The National Development and Reform Commission said Wednesday that with the rising acreage in major producing countries, soy prices are likely to stabilize after May.

The state-backed China National Grain and Oils Information Center Wednesday forecast soy output this year to fall 12 percent from last year to 14 million tonnes due to drought, floods and smaller acreage.