August 18, 2008


China soy prices fall as futures tumble


Soy prices in China's major producing regions were lower in the week to Friday (August 15) as futures prices tumbled.


Soy prices in Beian in Heilongjiang, the biggest producing province, were around RMB4,000 a tonne, down from RMB4,200-RMB4,800 a week ago.


Prices in Jiamusi in the same province were around RMB4,000 a tonne compared with RMB4,200-RMB4,800 a tonne a week ago.


Trading in many areas was halted as soy oil processing plants, which have been recording big losses, decided to suspend production for overhaul. Farmers and traders stayed on the sidelines amid weak prices.


China National Grain and Oils Information Center (CNGOIC) said in a note that farmers would be reluctant to sell new soy after the coming harvest if prices remain at current low levels, given the high input costs.


Soy oil prices were sharply lower on ample stocks and tracking the big fall in futures prices.


First-grade soy oil prices in Rizhao city in Shandong province were around RMB8,670 a tonne, sharply down from RMB9,050-RMB10,200 a tonne a week ago.


In Dongguan city in Guangdong province they were around RMB8,600 a tonne, compared with RMB9,000-RMB9,600 a tonne a week ago.


Traders and consumers were cautious buyers in expectations of lower prices, said Heilongjiang Jiusan Oil and Fat Co., adding prices may fall further in the near term.


China imported 170,000 tonnes of soy oil in July, down 17 percent on-year, according to preliminary data issued by the General Administration of Customs Friday.


The fall in July soy oil imports showed weaker demand and high import costs were weighing on an already weak market, said analysts.


China's soymeal prices were also lower, but the decline slowed on rebounds in the futures market.

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