Dalian soyabean and soyaoil futures rose to record highs on Wednesday, spurred by robust physical demand ahead of the New Year holidays, traders said. Spot prices are also at record highs, reflecting broader inflation in food prices that is increasingly concerning Beijing.
The most-active soyaoil contract, May 2008, rose 282 yuan or 2.8 percent to 10,228 yuan per tonne. "Demand picked up strongly before the New Year holidays," said Liu Defeng, an analyst with CIFCO Futures Co Ltd in Dalian.
Physical soyaoil prices rose as much as 5 percent, particularly in the north-eastern province of Heilongjiang, the country's largest soyabean producer, where a reduced domestic harvests has led to shortages.
"Crushers are running at lower capacity. Supplies of soyaoil are tight while soyameal stocks are high," said one analyst with a government grain think-tank, adding that domestic feed demand was weak amidst a slow recovery in demand from pig breeders. Traders expect soyaoil prices to continue rising next month, supported by Chicago Board of Trade futures. CBOT soyabean prices hit multi-year highs before Christmas.
"Crushers were anticipating soyaoil prices to go up to 15,000 yuan per tonne in January," said the manager. Beijing has partially offset rising corn and wheat prices by selling state reserves. Large imports of soyabeans in December and January would continue to pressure domestic meal prices, traders said. China imported about 3.1 million tonnes of soyabeans in December and a similar amount is expected to arrive in January.
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