November 19, 2003

 

 

China Soymeal Down In Week To Wednesday On Increased Supplies

 

China soymeal markets continued to slide in the past week as improved supplies forced crushers to keep their offers at lower levels, local traders in China said Wednesday.

 

The improved supplies came about as production resumed after the arrival of more soybeans for crushers.

 

Since late September, about seven cargoes of U.S. soybeans have arrived at the ports in China. The movement of soybeans from northeastern China to other major consuming regions have also improved after the government allocated more railcars for transportation, traders said.

 

Wednesday, the price of soymeal quoted by a large crusher in Jiangsu province, eastern China, was 2,750 yuan ($1=CNY 8.28) a metric ton, compared with CNY 2,800/ton about one week ago.

 

In other parts of China, soymeal prices lost CNY40-CNY90/ton in the past week.

 

"The market is likely to stay weak in the coming weeks as there will be soybean cargoes flooding into the ports, especially in December," a trader from a Hong Kong-based oilseeds company said Wednesday.

 

In November, about 23 to 25 cargoes of foreign soybeans are expected to arrive in China, higher than imports of 690,000 tons in October, traders said. Imports will gain momentum in December and could easily double the level in November, they said.

 

"Since late October to the middle of November, about 30 cargoes of U.S. soybeans have been shipped to China, and they are expected to arrive around early and middle December," said a trader in Hong Kong who tracks import data.

 

But as the Spring Festival in 2004 will be earlier than usual, the peak demand for soymeal from the local livestock industry is likely to keep prices from sliding much further from the current levels, traders said.

 

The higher cost of imported soybeans will also limit the downside to soymeal, the traders added.

 

"Soymeal could consolidate for some time. The fears about heavy arrivals of soybeans in the coming months could drag it down further. But given the expensive prices of imported soybeans, I won't bet on a price under CNY2,600/ton," a trader from China National Cereals, Oils & Foodustuffs Import & Export Corp. said Wednesday.