December 16, 2005

 

China soybean prices marginally higher; bird flu worries ease
 

 

Soybean prices in China's major soybean-producing areas were marginally higher in the week to Friday, as bird flu worries have eased.

 

In Harbin, the capital city of Heilongjiang province ¨C China's largest soybean-producing region - prices of average quality soybeans were quoted at RMB2,400-2,450/tonne Friday, up from RMB2,360-2,440/tonne a week earlier.

 

Prices in Jiamusi, a city in eastern Heilongjiang, were about RMB2,360-2,400/tonne, higher from RMB2,340-2,360/tonne a week earlier.

 

Soybean prices were quoted at about RMB2,360-2,400/tonne in Mudanjiang, a city in southern Heilongjiang, mostly higher from a week earlier.

 

In Jilin province, prices were in the range of RMB2,450-2,560/tonne, up from RMB2,440-2,520/tonne a week earlier.

 

China has reported only one outbreak of bird flu so far this month, compared with 26 cases of the disease in the past two months, according to reports by the Ministry of Agriculture.

 

In the past two months, local poultry and feed industries were depressed by a constant spread of the disease, but the markets have shown signs of stabilisation recently due to reduced bird flu concerns and an approaching peak demand season.

 

China's demand for feed as well as meat and poultry usually rise in the run-up to the Lunar New Year holidays, which would begin in late January 2006.

 

Some feed makers have witnessed some improvement in sales in recent days after sharp falls the previous month.

 

"This week, soymeal prices across the country have climbed up by about RMB100/tonne, or 5 percent, from the previous week," said Zhang Liwei, an analyst with China National Grain and Oils Information Center.

 

Meanwhile, corn prices have also risen slightly, Zhang added.

 

Soymeal, a byproduct of soybean, and corn, are mostly used as animal feed.

 

Trading in the soybean market has picked up slightly, but remains limited as buying from crushers is thin due to uncertainty in soy product prices, according to traders.

 

Crushers are reluctant to quickly speed up their activity before seeing more signs of recovery in the soy market, some traders said.

 

In addition, since the harvesting season this year, farmers have refrained from selling too much of their produce, because soybean prices are lower compared with the previous year, they said.

 

Nonetheless, selling from farmers is likely to rise in the coming month, as farmers would need more cash to prepare for the upcoming Lunar New Year, a trader added.