China to Import More Soybean Oil
Rising demand for edible oil could prompt importers to buy more soybeans.
Compiled by staff
Published: Nov 23, 2007
Dow Jones is reporting this week that surging vegetable oil prices in China could prompt importers to buy more soybeans. The report notes that China's soybean imports are set to rise, prices in the domestic market are likely to climb higher. The key factor is rising crude oil prices, which continue to support soybean prices, the report notes.
Since the beginning of this year, China's soybean prices in major producing regions have risen more than 70% to above CNY4,300 ($581) per metric ton due to concerns of lower domestic output.
Farmers and traders are apparently holding on to stocks in anticipation of higher prices, as a severe drought earlier this year, and dwindling soybean acres, have ended with forecasts of lower Chinese production for 2007. State-backed China National Grain and Oils Information Center lowered its most recent domestic soybean out forecast by 400,000 metric tons last month to 14 million tons. Local vegetable oil prices have also hit a new record at CNY10,000 ($1351 US) per ton. The China consumer price index has risen to an 11-year high of 6.5% in August and October and the government is concerned inflation will set new highs if food prices continue rising.
Most trade experts in China now say they expect Beijing to import 400,000 tones of vegetable oils - mainly soyoil - by the end of the year. The government would likely then stockpile the imports to release them into the market to stem price gains and knock down inflation.
In the week of Nov. 16, according to Dow Jones, Chinese companies booked 14 to 16 cargoes of soybean imports, up from about 11 cargoes the preceding week.
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Tagged: soybean, soybeans, Drought
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