Oversupply Gradually Appeared, Soybean Meal Price Continued to Decline for 3 Months

By CnAgri2017-03-27 09:43:53 Print

The soybean meal price continued to fall for 3 consecutive months in China and it dropped from 3,700 RMB/ton at the end of last year to the current 3,155 RMB/ton, down 500 RMB/ton from mid-December last year, the lowest level in the past eight months.

On the one hand, soybean meal supply greatly increased. From January to February this year, China’s soybean imports reached 13.2 million tons, up 30% year on year. According to the sail schedule, 22 million tons soybeans will arrive from March to May, higher than 20.83 million tons in the same period last year, the supply pressure of soybeans and soybean products increased significantly.

On the other hand, soybean meal demand remained sluggish. Hog breeding ranks first in China and hog feed consumption accounts for about 45% of the total consumption. Influenced by multiple factors, hog inventories and the slaughtered number of hogs have not been rising rapidly; affected by the bird flu, poultry breeding mostly suffers losses, the farmers were inactive in replenishment and the demand for feed remains weak as a whole.

Domestic soybean meal supply is expected to remain at a very high level in later period while the demand is difficult to rebound rapidly. Domestic soybean meal price is likely to go down in later period.