China soy prices lower on cheaper imports, fewer buyers
Soy prices in China's biggest producing areas were sharply lower in the week to Friday (December 12), despite purchases from the government, as falling global prices made domestic grades much less competitive.
Prices in Jiamusi city in Heilongjiang, a major producing province, were around RMB3,200 a tonne, down from RMB3,300 to RMB3,400/tonne a week ago. In Suihua, also in the same province, they were around RMB3,300/tonne, lower than RMB3,400 to RMB3,500/tonne the week before.
Barring purchases by state reserve houses, most traders in these areas stopped buying soy and processing plants suspended production as they couldn't offer to pay for high domestic prices.
Limited state purchasing locations and high quality standard of the government reserve houses also curbed farmers', said Heilongjiang Jiusan Oil and Fat Co. on its Web site.
So far, during the autumn harvest, the government has arranged to purchase a total of 3 million tonnes of soy. But as of December 5, it had bought only 840,000 tonnes of soy, or 28 percent of the planned amount, said an official from the State Administration of Grain.
Falling freight rates for imported soybean also plagued the market, and will pressure soy prices further on, said analysts.
Soyoil prices were also lower as processing plants stayed on the sidelines amid weak consumption and higher arrival of imported soy.
First-grade soyoil prices in Dongguan in Guangdong province were at RMB6,950 to RMB7,000/tonne, lower than RMB7,250 to RMB7,300/tonne a week ago.
First-grade soyoil prices in Rizhao in Shandong province were around RMB7,100/tonne, down from RMB7,220 to RMB7,350/tonne a week ago.
Demand ahead of the year-end holidays is not high, while consolidation in futures market has kept traders on the sidelines, said China Soybean Network in its note.
Soymeal prices were also lower in expectations of a weak demand.
Soymeal prices in Dongguan were at RMB2,980 to RMB3,020/tonne, down from RMB3,050 to RMB3,100/tonne.
Soymeal prices in Rizhao were at RMB2,960 to RMB2,980/tonne compared with RMB3,030 to RMB3,080/tonne.