December 17, 2007

 

China soy prices mostly stable; farmers reluctant to sell

 

 

Soy prices in China's major producing regions were mostly stable in the week to Friday (December 14, 2007), but prices were higher in some areas as farmers were reluctant to sell.

 

Many farmers stayed on the sidelines in expectation of higher prices on tight soy supply.

 

Soy prices in Jiamusi city in Heilongjiang province, a major soy producing region, were around RMB4,240 a tonne, up from RMB4,160 a week ago.

 

Soy prices in Hailun in the province were around RMB4,300/tonne compared with RMB4,280-RMB4,300/tonne a week earlier.

 

Stable Chinese demand and concern over possible a production cut in South America due to dryness there will continue to support soy prices, said analysts.

 

China's soy imports will stay at high levels of around 3 million tonnes each month over the next three months, said the China National Grain & Oils Information Center, adding some of the imports will be used to fill state reserves.

 

Soyoil prices were higher on rising soy prices on the Chicago Board of Trade and Dalian Commodity Exchange.

 

In Shandong province, prices of fourth-grade soyoil were at RMB10,120-RMB10,250/tonne, higher than RMB10,000-RMB10,050/tonne the previous week.

 

In southern Guangdong province, fourth-grade soyoil prices were between RMB9,850-RMB9,950/tonne, up from RMB9,800-RMB9,850/tonne a week ago.

 

Strong demand ahead of the year-end holidays also helped push soyoil prices higher.

 

Five government departments, including the National Development and Reform Commission, recently required big and mid-sized cities to increase vegetable oil reserves needed for emergencies and guarantee the market supply for at least 10 days.

 

Soymeal prices were also higher on rising prices on CBOT.

 

In Jiangsu province, prices of average-protein soymeal were between RMB3,780-RMB3,800/tonne compared with RMB3,700-RMB3,720/tonne a week earlier.

 

In Guangdong province, prices of average-protein soymeal were at RMB3,650-RMB3,700/tonne, higher than around RMB3,600/tonne.

 

But traders tended to stay on sidelines because of high prices, and the trading volume wasn't large.

 

Soymeal prices face downward pressure in the near term, threatened by bird flu and blue ear disease in hogs, with the sales volume of poultry feedmeal already significantly lower, said Heilongjiang Jiusan Oil and Fat Co.

 

RMB1 = US$0.1355 (Dec. 17)