November 25, 2003

 

 

China Domestic Soybean Prices Down On Week with Little Buying

 

Domestic soybean prices in the main soybean producing regions in northeastern China were weaker amid thin volume this week, largely due to low buying interest, local traders in China said Tuesday.

 

As of Tuesday, locally produced soybeans were offered for around 2,800 yuan ($1=CNY8.28) a metric ton in northernmost Heilongjiang, the top soybean producing province, compared with over CNY3,000/ton about a week ago.

 

"The buyers are reluctant to offer higher prices to farmers now, after the crushers in southern China lowered the buying prices because of poorer crush margins. The farmers are also not in a hurry to sell, eyeing better prices in the coming days," said a trader in Harbin, the capital of Heilongjiang.

 

Weak soybean and soy product markets in the major soy consuming regions in southern China in recent weeks prompted trading companies to lower their bids for new crop soybeans.

 

Recent snow in Heilongjiang also reduced buying interest because of transportation difficulties, added the traders.

 

SOYBEAN BUYING UNLIKELY TO PICK UP AS MEAL STKS BIG

 

With recent arrivals of U.S. soybean cargoes and more to come in the near future, crushers in southern China are struggling to keep crush margins positive.

 

"Soymeal markets in eastern and southern China were still weak in the past week, forcing some crushers to consider cutting crush operations. Soymeal stocks at the crushers are much higher now," a trader from a Hong Kong-based oilseeds company said.

 

Soymeal prices were offered around CNY2,650-CNY2,660/ton Tuesday in the eastern Jiangsu province, CNY110-CNY120/ton lower than a week ago.

 

Soybean buying in northeastern China is unlikely to pick up pace this week, because crushers still need some time to dispose off bulging soymeal stocks, added the traders.

 

Also, demand from the livestock and feedstuff industry isn't as robust as before, as many animal producers sold their poultry and livestock several weeks ago when these markets rallied to their highest levels so far this year.