November 11, 2008
China's soy futures likely to plummet due to economy downturn
Analysts predict China's soy futures market to dive despite a moderate present falling trend and a likely small rebound in the next two weeks.
The slide of crude oil price drags down industrial demand of soy, which serves as a substitution to produce bio-energy.
Beside the drop in oil prices, the loss of China's edible oil enterprises, which is brought on by international market fluctuations since China imports edible oil, also attributes to a lower demand of soy. Hence, enterprises will rather stock up than sell soy oil, weakening demand for soy.
As for bio-diesel oil enterprises, they are cutting down on soy demand, bearing in mind the high cost of transformation from soy to diesel oil and the crude oil price decline.