March 16, 2007

China soybean prices up due to snow in producing regions
 

Soybean prices in China's major producing regions rose slightly in the week to Friday, as supply was insufficient due to recent heavy snow.

In Harbin, the provincial capital of Heilongjiang province, China's largest soybean growing region, prices of average-quality soybeans were about RMB2,900/tonne versus RMB2,860-2,900/tonne a week ago.

Prices in the north-eastern part of the province rose to RMB2,800-2,820/tonne from about RMB2,800/tonne a week ago.

Traders said supply would remain tight in the coming months as farmers have less than 20 percent of their harvest at hand, and are reluctant to sell more.

Buying is dull as well, as processing plants are losing money due to falling soymeal and soyoil prices, said an analyst at the China National Grain & Oils Information Centre.

Cheap and large soyoil imports since December have been weighing on local soyoil prices, with no particularly strong demand to alleviate the pressure.

Soymeal and soyoil are made by crushing soybean.

"But soybean prices may fall a bit in the short term as import prices are lower than domestic prices," said another Beijing-based trader.