December 1, 2008

 

China's soy market is expected to stay strong in coming weeks, as more local crushers are likely to shift to cheaper imports, an official survey shows.

 

The China National Grain and Oils Information Centre (CNGOIC) said in a report that with big price differences between imported and domestic soy, they expect imports to remain at a high level.

 

Some crushers in Heilongjiang province, China's top soy area, had started to buy soy from the international market for the first time as government purchases for state reserves supported local prices above imports, the centre said. It did not elaborate.

 

China's soy oil market had weakened, following large imports this month and high production levels at crushers, it said.

 

The soymeal market remained bearish after domestic prices fell to their lowest level since September last year.

 

The market was expected to remain weak in coming weeks following large arrivals of low-cost soy imports.

 

The corn market ticked up from last week as processors started to build inventories. Feed mills in the south were also building stocks.

 

Farmers were likely to sell more of their harvest to the market next month for cash before the new year, which would pressure prices if the government did not increase its reserve purchase amounts accordingly, it said.