October 30, 2009

Soy prices in China major producing areas rose slightly in the week to Friday, as farmers continued to hold out for higher government purchase prices, and rising import prices pressured soymeal and soyoil stocks.

 

Soy prices in Suihua, in the major producing province of Heilongjiang, were RMB3,600-3,700 a tonne, up from RMB3,600/tonne last week.

 

In Jiamusi, also in Heilongjiang, prices were RMB3,620/tonne, up from RMB3,540/tonne a week ago.

 

"Heilongjiang prices are generally fetching RMB3,600-3,700/tonne," a report Friday from the agricultural industry information portal 93Group said.

 

"Sale volumes of new crop tend to be small, and government stockpiling policies remain uncertain," the report said.

 

Soy stocks in the last three months have halved to two million to three million tonnes.

 

But overall, the cash market remains fairly stable, with prices expected to increase slightly if current conditions persist, said Li Xiaoli, an analyst with Beite Futures.

 

Market expectations are for the government to raise its purchase price for new soybeans upward of last year RMB3,700/tonne level.

 

Import prices are trading at a premium to local prices, around RMB3,850-RMB3,900/tonne, so this combined with limited domestic soy availability makes for tight soyoil and soymeal supplies.

 

Soyoil prices in Shenyang, Liaoning province, were around RMB7,230/tonne, compared with RMB7,180/tonne a week earlier.

 

Soymeal prices in Rizhao were RMB3,640/tonne, compared with RMB3,570/tonne.

 

US$1 = RMB6.8287 (Oct 30)