December 15, 2006
China soybean prices mostly flat, likely to remain stable
Soybean prices in China's major producing regions mostly remained stable in the week to Friday, with little change on the supply and demand side, and analysts expect prices to remain relatively stable in the next few weeks.
In Heilongjiang province, China's largest soybean-growing region, prices of average quality soybeans were flat in the two main soybean trading centres.
In Harbin, the provincial capital, prices remained at RMB 2,500-RMB 2,520 a tonne, while prices in the northeastern part of the province were little changed from last week at RMB 2,440-RMB 2,480/tonne.
Prices in Jilin province, another major producing region in the northeast, were around RMB 2,600-RMB 2,620/tonne, unchanged from the previous week.
"Soybean prices are now capped by crushers' high inventory levels, with soymeal and soyoil prices remaining weak amid ample supply," said Zhang Liwei, an analyst at the China National Grain & Oils Information Centre, which comes under the State Grain Administration.
Soybean prices are likely to remain at the current level in the next two or three weeks, Zhang said.
But soybean prices are still underpinned despite the weak soymeal and soyoil prices, analysts said.
"Higher prices of import arrivals at Dalian port of around RMB 2,900/ton and farmers' low stocks indicate that we're unlikely to see a big drop in prices," said Chen Xiaomei, with the information department of Heilongjiang Grains & Oils Wholesale Market.
"Prices are likely to rise a month ahead of the Spring Festival, along with rising demand from crushers," Chen said.
China will celebrate the traditional Spring Festival in late February.
Import arrivals in the first 10 days in December reached 1.2 million tonnes, and total arrivals in the month are likely to top 2.5 million tonnes, COFCO Futures Co. estimated.
China National Cereals, Oils & Foodstuffs Corp., a major grain trading company, holds a controlling stake in COFCO Futures Co.
