September 5, 2011

Soy prices in China were little changed in the week to Friday (Sep 2), as locally-produced soy is almost sold out, but mounting port stocks hampered import demand despite higher crushing rates.

Prices in Heilongjiang, the top producing province, were around RMB3,900 (US$616)/tonne, unchanged from a week earlier, while import prices at major ports were also flat around RMB4,250 (US$665)/tonne.

Ex-factory prices of soyoil were around RMB10,150 (US$1,589)/tonne Friday, up 1.5% from a week earlier, traders said.

The operating rates of domestic crushers rose, boosting weekly soy consumption to around 1.1 million tonnes, but crushers are still reluctant to place new import orders due to high port inventories and high import prices, analysts said. Port inventories are around seven million tonnes.

Drought is affecting soy crop in Heilongjiang province, a major producer, during a crucial period for crop growth, with market participants awaiting cues on further price moves from the harvest due end-September.

As of August 25, China had purchased 8.9 million tonnes of US soy for the 2011-12 marketing year that began September 1 last year, down 210,000 tonnes from a year earlier, the USDA said.

Auctions of state soy reserves, higher global prices, thin crushing profit margins and high port stocks curbed the demand for imported soy, the state-backed China National Grain and Oils Information Centre said.