August 6, 2007

 

China soy prices up on weather concerns; soy oil surged

 

Soy prices in China's major producing regions were higher in the week to Friday (August 3) on weather concerns.

 

In Harbin, the capital of Heilongjiang province, Chinas's largest soy growing region, prices of average-quality soys were around RMB3,100 a tonne, higher than RMB3,040 a week earlier.

 

Prices in Jiamusi City in the northeastern part of the province were RMB2,960 to RMB3,040/tonne, compared with RMB2,960/tonne a week ago.

 

A total of 11 million hectares of crop acreage in China had been affected by drought as of Wednesday, according to the Office of State Flood Control and Drought Relief Headquarters.

 

Heilongjiang province, the major soy-producing region, was among the areas that had been hit the hardest, with more than one-third of crop areas in the province being affected, it said.

 

Soy prices will likely rise further in the short term, said Heilongjiang Jiusan Oil and Fat Co., as there will be little rain and high temperatures.

 

Soy oil prices surged on dwindling stocks as many processing plants reduced or stopped production earlier due to sluggish soy meal demand.

 

Traders and companies increased their purchasing amounts in preparation for the Mid-Autumn Festival and the National Day holidays starting late September, said the China National Grain and Oils Information Centre (CNGOIC).

 

In Shandong province, fourth-grade soy oil prices were between RMB8,550 to RMB8,610/tonne, jumping from RMB8,250/tonne in the previous week.

 

In southern Guangdong province, fourth-grade soy oil was at RMB8,400 to RMB8,600/tonne, higher than RMB8,050 to RMB8,200/tonne last week.

 

In the eastern city of Dalian, fourth-grade soy oil surged to RMB8,700 to RMB9,500/tonne, compared with RMB8,200-RMB8,300/tonne a week earlier.

 

Soy meal prices were higher as feedmeal companies and traders started purchasing again as inventories ran low.

 

In Jiangsu province, prices of average-protein soy meal were RMB2,420 to RMB2,550/tonne, higher than RMB2,390-RMB2,450/tonne a week earlier.

 

In Guangdong province, prices of average-protein soy meal were RMB2,420 to RMB2,500/tonne, up from RMB2,400-RMB2,420/tonne a week earlier.

 

Soy meal demand increased while stocks at processing plants fell in general, said CNGOIC.