Import price of soybeans rises
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China's import price for soybeans rose by 20.4 percent year-on-year in January, further adding pressure on the government's efforts to contain inflation, analysts said on Monday.
The import price of soybeans jumped to $558 a ton in January, while the import volume shrank by 5.3 percent month-on-month to 5.14 million tons, according to data from the General Administration of Customs.
"The high international price will force processing companies in China to turn to domestic soybeans, and that may, in turn, push up domestic prices," said Hu Bingchuan, researcher at the Rural Development Institute of the Chinese Academy of Social Sciences.
"The surging price in the global market puts a lot of pressure on China's high inflation rate," he added.
The price increases in agricultural commodities have caused global concern. According to a report from the Food and Agriculture Organization (FAO), its Food Price Index, after strengthening for seven consecutive months, hit the highest level since 1990.
Meanwhile, wheat prices on the Chicago Board of Trade rose by 78 percent year-on-year by the second week of February, while corn jumped by 92 percent compared with the same month last year.
However, soybeans fell for a second day on Friday, capping the biggest weekly decline since early January, on signs that a rally to a 30-month high will slow demand for US supplies as harvesting begins in South America, Bloomberg reported.
From Sept 1 to Feb 3, US sales to China, the biggest importer, rose 10 percent from a year earlier to 23.821 million tons, according to Bloomberg.
Soybeans, valued at $31.8 billion in 2009, are the biggest US crop after corn, US government data show.
The surging global food price was partly due to increasing inflation expectation over uncertain weather conditions across the world, Hu said.
Affected by extreme weather, soybean exports from the US, Brazil and Argentina, the top three global soybean exporters, were expected to drop by 9 million tons, according to a report released by Rabobank on Friday.
In China, wheat traded at a record high in Zhengzhou Commodity Exchange, one of the four exchanges in China, amid growing concerns that the drought in the country may prompt the world's biggest consumer to boost imports, according to a Bloomberg report.
The severe winter drought in northern China, the country's main winter wheat producing area, prompted the FAO to issue a special warning report early in February, saying the substantially below-average rainfall in the area "may put wheat production at risk" and "seems to be putting further pressure on wheat prices" globally.
The FAO Food Price Index showed in February that in China the prices of the main staples, rice and wheat, have been rising during the last few months.
The Chinese government said on Wednesday it will spend $1 billion to battle the drought plaguing huge areas in the north by implementing a slew of measures such as diverting water to affected areas and constructing emergency wells and irrigation facilities.
