December 30, 2005

China soybean prices steady amid balanced market
 

Soybean prices in China's major soybean-producing regions were steady in the week to Friday, as supply and demand remained balanced.

In Harbin, the capital city of Heilongjiang province ¨C China's largest soybean-producing region - prices of average quality soybeans were quoted about RMB2,420/tonne, unchanged from the previous week.

Prices in different areas of Heilongjiang province were in the range of RMB2,420-2,460/tonne at the end of this week, mostly steady from a week earlier.

In Jilin province, another soybean production base in China, the price was about RMB2,500-2,580/tonne, almost unchanged from a week ago.

No big fluctuations usually occur in trading before Chinese Lunar New Year, although it is normally more active than the rest of the year, traders said.

While demand for soybeans rises with demand for soyoil and soymeal, as Lunar New Year is only about a month away, consumption of poultry and other foods rises and sales by farmers increase, traders said.

Soymeal, a by-product of soybeans and corn, is mostly used as animal feed in China.

"They (farmers) need more cash to buy things and prepare for the New Year, as they know now is the best time (to sell). Otherwise, difficulties with transportation in January will prevent soybeans from moving out from farms," said Wang Shiliang, an analyst with Jilin Grains Center.

Meanwhile, crushers are still cautious and are not buying too much for inventory due to concerns over bird flu, traders said.