September 23, 2003



No End Seen in the Price Hikes of Raw Materials; Feed Millers in China Busy Raising Prices


An eFeedLink Exclusive Report


Soymeal prices throughout China are still on a continual rise for the week ended September 22, with highest quotation already reaching RMB2500/ton. Seeing the continual price hikes, many soyoil producers are seen cutting down their current output or simply cease transaction in the hope to profit more by selling their inventories in forthcoming October or November. This fueled further tightness in supply, consequently causing prices to soar further.


It was reported in week ended September 19 that actual transacted prices for lysine in China rose to RMB22500/ton, with highest transacted prices hitting RMB26000/ton. Lysine continues to remain extremely tight in certain regions.


Feed millers have been taking action to raise the prices of their feed products since soymeal prices began to rise from August this year. Some feed millers have already increased prices for the third time. As many small-scale feed mills have been operating for a loss for sometime, and for their continual survival, many of them are planning to raise prices for their feed products soon or have already done so.


Prices of poultry meat, eggs and milk are like to surge for the nearby term following the price hikes of raw materials for feed production. Some market analysts are forecasting that the price rises for feed, poultry and egg products will continue into early 2004.