Soy product futures ended mixed, with soyoil managing to rise against soymeal on adjustments in the meal/oil spread relationship ahead of Thursday's crop reports. December soyoil settled 0.15 cents or 0.4% higher at 42.38 cents per pound. Speculative funds were estimated buyers of 3,000 lots in soyoil. December soymeal ended $1.90 or 0.7% lower at $287.90 per short ton. Speculative funds were estimated sellers of 2,000 lots in soymeal. (Source:CME)
Argentina Soyoil Sales To India Carry Deep Discount(Source:CME)
While Argentina has increased soyoil sales to India to partially make up for lost exports to China, exporters and farmers are paying for it dearly due to steep discounts for Argentine soyoil, the Buenos Aires Cereals Exchange said in a press release Wednesday.
In April, China blocked the import of Argentine soyoil, citing quality issues, in a move widely seen as retaliation for barriers imposed by Argentina to slow the flow of Chinese products into the local market.
China is the largest buyer of Argentine soyoil and soybeans, Argentina's top export, and China depends on Argentina for the bulk of its soyoil imports.
But since the Chinese slammed shut imports, Argentine soyoil has been selling at a discount of about $50 per ton compared to Brazilian soyoil, the exchange said. That works out to about 5%.
That will affect about 6 million tons of soyoil exports this season, bringing down farm profits and export tax revenue, according to the exchange.
In addition, Chinese soybean millers have taken advantage of the blocked Argentine soyoil imports to bring in about 40% more Argentine soybeans than initially expected for processing in China, the exchange said. China has greatly expanded soybean processing capacity in recent years and is easily able to handle the increased domestic crushing rates.
The exchange called for a rapid end to the trade spat with China and a resumption of soyoil trade. But so far little progress has been made.
In addition, last month Argentina slapped new tariffs on some Chinese textile and food processor imports, a move sure to increase tension with the Asian giant.
As in previous cases, Argentina accused Chinese manufactures of dumping and fixed a minimum reference price for import taxes on the goods.
While the dispute with China drags on, Argentina is pushing hard for India, the world's second-largest edible oil consumer after China, to take up the slack. The South-Asian country meets more than half of its annual needs through imports of palm oil from Indonesia and Malaysia and soyoil from Brazil and Argentina.
Last year very little Argentine soyoil made it to India, but exports to the Asian country are expected to reach $1.5 billion in 2010, Argentina's foreign ministry said in a press release Monday.
India has already bought over $1 billion worth of soyoil during the first six months of the year, according to the release.
Palm flat as higher soyoil, weaker demand clash
KUALA LUMPUR, Aug 11 (Reuters) - Malaysian crude palm oil futures barely moved with the market torn between concerns over weaker demand and stronger U.S. soyoil.
"India is importing a massive amount of soyoil from Argentina. China is buying from South America for their requirement," said a trader in Kuala Lumpur. "Palm oil demand is likely to fall, due to its price parity with soyoil."
Wilmar to buy 20 pct stake in Kencana Agri-sources
SINGAPORE, Aug 11 (Reuters) - Singapore's Wilmar , the world's largest palm oil firm, plans to take a 20 percent stake in small rival Kencana Agri , sources with knowledge of the deal told Reuters.
Most of Kencana's plantations are located in the Kalimantan and Sulawesi regions in Indonesia. It has only planted 20.1 percent of its 188,784 hectare landbank.
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