April 21, 2008

China soy oil prices seen stable

China's most recent figures indicate that soy oil prices have gradually eased and stabilized.

Soy oil accounts for 60 percent of the country's cooking oil and is mostly imported.

With still half a month before the seed planting season, a soy farmer in Northeast China's Heilongjiang Province has bought seeds ahead of time.

Han Qingwu, soy farmer, plans to double his planting areas to take advantage of higher prices. 

Soy is sold at around RMB2.8 (US$0.40) per 500 gramme, from RMB1.5 (US$0.21) to RMB1.6 (US$0.23) in previous years, Han said.

In 2006, due to weak prices, soy planting areas fell by 25 percent, and in 2007, it fell a further 12 percent.

To meet domestic demand in 2006, China's soy net imports reached 28 million tonnes, which is 1.8 times the scale of domestic production, and in 2007, imports of soy reached 30 million tonnes.

Zhou Youjin, Deputy Secretary-general of Soybean Association of Heilongjiang Province, said soy imports have reached 70 percent of the overall consumption.

The imports, Zhou said, decided domestic soy price levels.

Global soy market has surged 36 percent due to speculative factors, leading to price hikes in cooking oil.