October 30, 2008

 

China seeks US soy

China's soy-crushing plants are turning to the US for cheaper imports of oilseed at the expense of domestic supplies because the government's state reserve purchases have marked up local prices. The China National Grain and Oils Information Centre (CNGOIC) recently conducted a survey in the market and found that after the state purchases were made at prices of US$541.30 a tonne, domestic prices were pushed above those of imports.

 

CBGOIC said in a report there are more enquiries on imported soy by crushers, but import volumes are expected to remain flat due to ample supplies following months of strong purchasing of commodities. The majority of soy imports were from crushing mills in the north of the country.

 

Meanwhile, documents were issued on farm reforms that were discussed last week in the conclusion of the Communist Party of China sessions. They focus on supporting the rural sector with some changes in land ownership. The documents issued also note an increased focus on oil-bearing crops to increase its ability to be self-sufficient in edible oils.

 

Cotton, sugar, potatoes and livestock were mentioned as areas of focus for the new efforts, according to reports. There are still some limitations to the transfer of farmland but the new policy's aim is to help bolster output.

 

US soy complex higher on firm petroleum prices, stable dollar and strong export

 

The soy complex closed mostly higher on October 16 amid a stable US dollar, firmer crude oil prices and solid sales figures. The soy balance sheet looks to be sufficiently supplied amid gloomy world demand that may be weakened further by macroeconomic issues. Efforts by OPEC to reduce crude production are supportive of petroleum; grain and oilseed futures in the long run, but downside risk prevail in the near term, as the process may not have fully reached its potential.

 

November bean futures closed up US$9.37, finishing at US$324.99; January gained US$8.73, closing at US$326.46; and March was up US$8.54, ending at US$329.40.

 

December meal increased US$12.90 closing at US$296.52; January was US$11.90 higher, finishing at US$296.19; and March meal closed up US$11.90, ending at US$298.28.

 

St Lawrence Seaway strike may affect oilseed and grain exports

 

Employees of the St. Lawrence Seaway could soon be on a strike and succeed in shutting down the international shipping route used by exporters of both the US and Canadian grains and oilseeds. A strike vote last month reportedly provides union workers the authority to strike on 72 hours notice at any time after October 10.

 

Usually open for traffic from late March until late December, export grain and oilseeds from central US and Canadian farms move through the Seaway to markets in Europe, North Africa, the Middle East, the Mediterranean, Russia, Central and South America.

 

According to the St. Lawrence Seaway management Corporation, grain and oilseed tonnage in recent years has averaged about 10 million tonnes (367.5 million bushels) making up about 25 percent of the Seaway's total cargo capacity.

 

India may tax vegetable oil imports

 

India is looking into taxing vegetable oil imports to protect the domestic industry from a slump in prices and lift a ban on exports, said the farm minister today, according to Reuters.

 

Sharad Pawar also said the government would consider discarding an export tax of 8,000 rupees (US$162.3) per tonne on basmati rice next month. Global edible oil prices have fallen and have created problems for producers here. Decisions on imposing duty on imports will be decided.

 

India dropped a 20-percent import tax on crude edible oils in April and reduced the tariff on refined oils to 7.5 percent from 20.75 percent counter rising prices.