China crushers resume production amid soy price gain
As China soyoil processors re-start production, soy futures in China registered an upswing and are expected to remain strong through the end of the year.
The benchmark soy contract 0905 traded on Dalian Commodity Exchange fluctuated moderately this week and ended RMB80/tonne higher over the last trading day of the previous week.
Despite drops in soyoil futures prices in China and abroad and falls in crude oil prices on the international market last month, the market price of domestic soyoil remained steady.
By the end of November, soyoil of national standard grade 1 was quoted RMB7,100-7,150/tonne in coastal areas of China, staying flat with the price a month ago.
A survey showed that some regions in China faced tight supply of the first grade national standard soyoil as large oil processing companies mainly targeted sales of small packaged oil for the coming Chinese New Year season and cut sales of bulk soyoil.
In addition, China's soyoil price is expected to remain stable in December as market promotions for the coming new year holiday will spur consumption, according to the China National Grain and Oils Information Center.
Still, China is expected to import less soyoil this month and in January with most imports purchased by the state and not flow into the market.
However, as China enters consumption peak in the next two months, oil processing companies and traders predict soy price will increase and are active in purchasing soy.
Domestic breeding industry has showed signs of recovery recently, boosting demand for soymeal moderately.
However, soy prices are unlikely to increase by a large margin due to oversupply of imported gene modified soy.
US$1=RMB6.8519 (Dec 23)