December 1, 2008


China soy prices settle lower, pressured by cheap imports


Prices across the soy complex in China's major producing areas were mostly lower in the week to Friday (Nov 28) as cheaper imports maintained downward pressure on production costs.


Soy prices in Jiamusi city in the major producing province of Heilongjiang were around RMB3,400 a tonne, down from RMB3,460/tonne a week ago.


Soy prices in Suihua in the province were around RMB3,500/tonne, unchanged from the week before.


Local production costs would not be able to resist the pressure from far cheaper imports, said Dong Liang, an analyst with Hongyuan Futures in Beijing.


Imports now average RMB3,200/tonne, and up to 90 percent of harvest stocks are still in farmers' hands, said Gao Yanrong, an analyst with Great Wall Futures in Shanghai.


"Attempts to keep soybean prices at RMB3,700/tonne aren't very realistic," said Gao.


The government has said it will buy 5 million tonnes of soy from the northeastern provinces at RMB3,700/tonne to support local prices, and the market expects Beijing to purchase another 5 million tonnes soon.


"The market is now waiting for a clear direction from how external markets will act on local prices," said Li Panfeng of Beite Futures Co.


Soyoil prices were also lower in the week to Friday (Nov 28).


First-grade soyoil prices in Dongguan in Guangdong province were at RMB6,850-RMB7,000/tonne compared with RMB6,950-RMB7,000/tonne a week ago.


First-grade soyoil prices in Rizhao in Shandong province were at RMB7,000-RMB7,200/tonne compared with RMB7,200-RMB7,300/tonne a week ago.


Soymeal prices also fell.


Soymeal prices in Dongguan were at RMB3,080-RMB3,120/tonne, down from RMB3,180-RMB3,200/tonnes.


Soymeal prices in Rizhao were at RMB3,100-RMB3,150/tonnes compared with RMB3,180-RMB3,250/tonnes.


Soymeal import prices were around RMB2,700/tonnes, said Gao.


US$1=RMB6.825 (Nov 29)

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