December 26, 2007
Wednesday: China soybean futures settle up on rising edible oil prices
Soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday on surging vegetable oil prices.
The benchmark September 2008 soybean contract settled up RMB117 at 4,624 a metric tonne.
One lot is equivalent to 10 tonnes.
"The market has already digested negative policies from the government (on price controls), and it is the demand and supply (that will) decide the market (performance)," said Capital Futures analyst Dong Shuangwei.
The government launched a series of policies recently to prevent domestic prices from surging before the Chinese New Year holiday.
These included the Dec. 20 cancellation of value-added tax rebates on exports of wheat, corn, rice and soybeans, and flour made from these grains.
In another move Wednesday, the Ministry of Finance said it will extend the soybean import tariff reduction till March 31. The tariff was cut to 1% from 3% for the October-December period to stabilize volatile domestic prices.
The ministry said also that it will adjust its variable tariff rates for cottonne imports under additional tariff rate quotas to 5%-40% from 6%-40% in 2008.
But analysts said any such government policy is unlikely to be effective in the short term as demand - especially for vegetable oils - far exceeds supply.
There is usually strong demand for vegetable oil from the restaurant sector ahead of Chinese New Year.
Palm oil futures, soyoil futures, soymeal futures and corn futures all settled mostly higher.
Wednesday's settlement prices in yuan a metric tonne and volume for all contracts in lots:
Contract Settlement Price Change Volume
Soybean Sep 2008 4,624 Up 117 772,054
Corn May 2008 1,723 Up 7 457,054
Soymeal Sep 2008 3,378 Up 63 1,007,608
Palm Oil May 2008 9,178 Up 184 23,094
Soyoil May 2008 10,146 Up 200 157,134
