August 1, 2011

 

China' soy prices gain on soymeal, edible oils growth
 

 

Soy prices in China rose slightly in the week to Friday (Jul 29), as spillover strength from edible oils and soymeal offered some support.

 

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 RMB3,840-3,880 (US$596-603)/tonne. Import prices at major ports were up RMB20 (US$3.11) from a week earlier at about RMB4,120 (US$640)/tonne.

 

Retail edible oil prices have shown signs of rising, with some supermarkets raising prices, as the government may not extend its price caps, which will expire in mid-August, traders said.

 

Soyoil prices as of Wednesday were RMB10,000-12,000 (US$1,553-1,864)/tonne, up 3% from a month earlier, while rapeseed oil prices stood at RMB10,500 (US$1,631)/tonne, up about 4% on-month, said Chinese Oil Network in a research note.

 

The slight rise for soyoil enabled domestic crushers to break even in July, analysts said.

 

Crushers are very likely to reap profit margins of RMB200-300 (US$31-46)/tonne through the first half of 2012, far higher than the normal profit margin around RMB100 (US$15)/tonne, experts added.

 

Strong demand between the Mid-Autumn Festival, which falls in late September, and National Day, which is celebrated in early October, in addition to strong demand for soymeal amid a hog production expansion spree, will be pushing soy prices higher, market participants said.

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