July 25, 2011

Soy prices in China were slightly higher in the week to Friday (Jul 22), led by strong demand for soymeal and rising feed ingredient costs.

The average price in the top-producing province of Heilongjiang, which accounts for about 40% of the country's output, rose RMB10 (US$1.55) to RMB3,830-3,870 (US$594-600)/tonne. Import prices at major ports were unchanged from a week earlier at about RMB4,100 (US$636)/tonne.

Soymeal price in the week rose RMB70 (US$11)/tonne, or around 2% from a week earlier, driven by growing demand from feed mills. Soymeal is widely used in hog feed.

China produced about 17.73 million tonnes of animal feed in June, a sharp increase of 15.4% from May, according to the National Bureau of Statistics.

Soy trading activities in major producing areas have almost stopped, with some crushers halting production and traders staying on the sidelines. Most traders are waiting for new-crop soy, which will hit the market around October.

Prices of soy are likely to stay firm and trend higher on increasing demand for soymeal and soyoil, but tough inflation-combating policies and high port inventories continue pressuring prices, the Chinese Grain Network said.