June 2, 2006

 

China's soy prices slightly down due to influx of imports

 

 

Soy prices in China's major producing regions slightly fell this week, pressured by imports and lower international futures prices.

 

In Heilongjiang, China's largest soy-producing province, prices of average quality soy fell RMB20-RMB30 to RMB2,260-RMB2,330 a tonne.

 

In Jilin province, another major soy-producing area in China's north-east, prices were RMB10 lower, around RMB2,470/tonne on average.

 

Crushers are reluctant to buy locally grown soy, which are more expensive than imported ones, especially with a large volume of foreign-origin soy coming into port and a slow recovery in domestic feed demand, traders said.

 

"Many crushers that used to buy local soy have either closed or reduced production, and are struggling to survive," said Li Ke, an analyst at the China National Grain & Oils Information Centre.

 

Moreover, with the Chicago Board of Trade failing to send more positive signals for soy prices, cash values lack support, Li added.

 

"CBOT prices will largely decide local spot market prices," he said.

 

Imports of soy in April rose 35 percent on-year to 2.57 million tonnes, according to China's customs department.

 

Meanwhile, COFCO Futures Co. estimated a total of 2.8 million tonnes of imports arrived in May.

 

China National Cereals, Oils & Foodstuffs Corp, a major grains trading company, holds a controlling stake in COFCO Futures Co.