December 9, 2005

 

China soybean prices largely steady but trading sluggish
 

 

Soybean prices in China's major soybean-producing areas were largely steady in the week to Friday after falling moderately since late October on bird flu worries.

 

However, trading continued to be sluggish, as buyers stayed on the sidelines while farmers were reluctant to sell at current prices.

 

In Harbin, capital city of Heilongjiang province -- China's largest soybean-producing region - prices of average quality soybeans were quoted at RMB2,360-2,440/tonne Friday, slightly higher from a week earlier, according to a local trader.

 

Prices in Jiamusi, a city in eastern Heilongjiang, were about RMB2,340-2,360/tonne, largely flat from RMB2,350-2,360/tonne a week earlier.

 

An official with a soybean crusher in Jiamusi said the market has more or less stabilised in the past week, as China has not reported any new outbreaks of bird flu in poultry since Thursday last week.

 

The government has reported 25 outbreaks of bird flu across the country since October and domestic soy and corn markets have been mostly on the decline.

 

"We can make both ends meet, but we don't have any profit," the Jiamusi official added.

 

Compared with a few weeks ago, the Jiamusi crusher now sells soymeal at a lower price of about RMB2,050-2,080/tonne and soyoil at a higher price of RMB5,400/tonne, he said.

 

Soybean prices were quoted about RMB2,300-2,360/tonne in Mudanjiang, a city in southern Heilongjiang, mostly steady from a week earlier.

 

In Jilin province, prices ranged from RMB2,440-2,520/tonne, steady from RMB2,420-2,520/tonne.

 

Traders said many large crushers based in coastal Liaoning, Hebei and Shandong who used to buy domestic soybeans at this time each year, have been staying on the sidelines since October due to bird flu concerns.

 

Instead, some of them have switched to buying cheap soybeans from overseas or have halted their operations, a Dalian-based trader said.

 

Resale prices for imported soybeans were quoted about RMB2,600-2,640/tonne along the Chinese coast Friday, largely steady from a week earlier, but trading was limited.

 

Looking forward, "bird flu will continue to be closely watched, a factor impacting on domestic demand for soymeal," said a Shandong-based trader. "A rebound in domestic soybean prices will take some time."