October 17, 2011


China's soy prices flat; farmers hoarding new crops


Soy prices in China's major producing areas were mostly stable in the week to Friday (Oct 14), but trade was thin as farmers are reluctant to sell.


Prices in Heilongjiang, Jilin and Liaoning provinces, the top soy producing areas that account for more than 50% of China's total output, were between RMB4,060-4,140 (US$636-649)/tonne, unchanged from a week earlier.


Farmers in major producing areas have almost finished reaping their harvest following conducive weather, but they see current market prices about RMB200 (US$31)/tonne too low and are waiting for the government to set benchmark prices by buying to replenish its reserves, a trader said.


Last year, the government set its purchase price at RMB3,800 (US$596)/tonne - slightly higher than the market price - to replenish state reserves and encourage domestic production.


Market participants expect it to raise the price to RMB4,200 (US$658)/tonne this year.


The state-backed China National Grain and Oils Information Centre said it expects soy output this year to fall 10.5% to 13.5 million tonnes. Market participants said the decrease in output might be more than 15%.

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