Chinese soybean crushing plants close, soybean meal prices rise
The newly purchased soybeans are transferred to silos of the China Grain Reserves Group in Harbin, northeast China’s Heilongjiang Province, on November 8, 2019. A new round of food grain supply is underway in the region. autumn in Heilongjiang Province, China’s largest grain producer.Photo: Xinhua
Dozens of soybean crushing plants have been ordered to close and halt production amid rising demand, rising coal prices and the goal of carbon neutrality. The temporary shutdown will not have a significant impact on market supply and soybean imports, experts said.
Factories in several provinces have reportedly been ordered to cut or shut down operations, including some large soybean crushing plants, industry and media sources say.
An employee of a major national soybean, feed and vegetable oil processor in east China’s Jiangsu Province confirmed to the Global Times on Saturday that due to the reduction in the electricity consumption in their factory, it had been ordered to stop part of the production, as well as other neighboring plants.
A source with a major Chinese fodder producer told the Global Times on Saturday that it is true that a large number of soybean meal factories across China have been temporarily suspended.
Lower production supported high prices for soybean oil and meal. The November soybean oil contract on the Dalian Commodity Exchange jumped nearly 0.52% on Friday. The price increase is in line with the national average soybean meal price which rose 23 yuan to 3,788 yuan (US $ 586) per tonne on Friday, up 0.58% from the previous day.
The current spate of price hikes has been attributed to low supply expectation caused by the electricity suspension as well as rising global shipping costs, Jiao Shanwei, editor at Global Times, told the Global Times. head of cngrain.com, a website specializing in grain news. Saturday.
Although there is a short-term price increase, the overall market supply will be stabilized as companies have some inventory, Jiao said.
The large fodder source also said that some factories are producing soybean meal based on the orders they have received, so it is normal for them to suspend intermittent production.
China’s soybean imports are expected to reach a new high this year, boosted by the recovery of domestic pig farming and the boom in trade relations between the United States and China, he said. -he declares.
“The fourth quarter has traditionally been a peak season for the consumption of edible pressing oil, and soybean import will be relatively large,” Jiao said.
In addition to the soybean industry, the impact of this series of shortages has been widespread, mostly affecting energy-intensive industries, after several provincial governments issued notices regarding electricity restrictions.
Textile is an industry that requires a lot of energy. Tan Ke, head of the Keqiao District Trade Bureau in Shaoxing City, east China’s Zhejiang Province, told the Global Times on Saturday that the district had rated factories based on their consumption of energy amid blackouts, some having already resumed production. As a hub of the world-class textile industry, the district has the largest professional textile market in Asia, where around 25% of the world’s outer fabric is traded every year.
The Tianjin Bureau of Industry and Information Technology also implanted power curbs for a week from Thursday, according to a government document seen by the Global Times.
Power shortage is due to increase in manufacturing export orders after China first to recover from pandemic as well as increase in coal prices, Lin told Global Times Boqiang, director of the China Center for Energy Economics Research at the University of Xiamen. Saturday.
Due to China’s rapid economic recovery, China’s electricity consumption increased 16.2% in the first half of the year.
To solve electricity shortages and meet the need for decarbonation, eight provinces that have reached their emission limits, including Jiangsu, Guangdong and Fujian, have been urged to reduce their energy consumption and carbon intensity. , according to a notice published by the Chinese economic planner in August. .
Market watchers expected the blackout to become a new normal in the near term.
“Coal-fired power plant output cannot meet the growing demand for electricity, and clean energy cannot completely replace coal-fired power plant. Therefore, it is expected that power outages will be the normal state for one to two years, Han Xiaoping told the Global Times on Saturday.