September 12, 2011


China's soy prices flat ahead of new crop harvest


Soy prices in China were mostly unchanged in the week to Friday (Sep 9), as trading almost halted due to scarce inventories with farmers.


Prices in Heilongjiang, the top producing province, were around RMB3,900 (US$610)/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$1,588)/tonne Friday, unchanged from a week earlier but 30% higher from a year earlier, while soy prices were up 18% on-year, traders said. They expect soy prices to rise further as demand improves.


The new soy crop harvest is expected to begin next week in major producing provinces.


"Prices of new-crop soy will be at least RMB4,000 (US$626)/tonne," analysts said, adding that an estimated decline in output in China and the US will underpin oilseed prices and demand will further increase, despite a 5.5% fall in imports in the first seven months.


"The decline in imports is mainly due to the release of state (soy and edible oil) reserves," she said.


The government has sold some three million tonnes of soy to major crushers and around two million tonnes of rapeseed oil in the market since last October.


Fei Zhonghai, deputy general manager of Cofco Agri-Trading & Logistics, a unit of China's state-owned grain trader, Cofco Corp, said earlier this week that its overall soy demand in 2012 will be higher than 2011.


Cofco has postponed some soy purchases due to high global prices, but the overall purchase plan has not been affected.

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