China, the world's top soya importer, will sell 3 million tonnes of domestic soya from state reserves to some crushers at a below-import price of 3,500 yuan ($535.325) per tonne, part of Beijing's efforts to cool food price rises. But unlike the previous state soya auctions when Beijing set unattractive prices, traders said the offering price to major crushers this time was attractive for those along coastal areas that normally buy imports.
"We believe some crushers (in the coastal areas) may be interested. The price is about 200 yuan per tonne cheaper than current Brazilian soya prices," said one trading manager. Traders said some crushers plan to defer some of their soya shipment but are having difficulty doing so. "The sale could hurt buying interest by crushers for South American soya for July and August shipment" because soya plants have not fulfilled their needs for these months, said the manager who declined to be identified.
Another trading manager confirmed the volume and price and said the amount of soya would be sold to 5-6 crushers that have been asked by Beijing to cap retail prices of soya oil at some 1,000 yuan per tonne lower than current market prices. "It is partly because of the political task of bringing down inflation, while the soya from 2008 harvest has been stored for quite some time and the government wants to sell them before summer," said another trading manager.
The sale follows Beijing's orders to crushers, which have 80 percent of the retail market, to extend a price cap that has been in place since December. Besides soyabeans, Beijing has regularly sold state rapeseed oil reserves, which have pressured domestic edible oil prices and eaten into profits of soya plants.
Comments
Comments are closed for this article.