February 3, 2010

China to sell 208,400 tonnes of soy stockpile amid high imports

China's grain reserves management agency, Sinograin, is selling 208,400 tonnes of domestic soy from state reserves to the market.

The soy was stored in warehouses in the inland province of Heilongjiang, according to the company notice.

A Sinograin official contacted by said the sale was a routine "rotation" of state reserves -- selling old supplies and replacing them with new harvest. The official declined to give more details.

Traders said the offered price of about RMB3,740 (US$548) per tonne was not attractive to local crushers, although possibly for food plants which produce soy sauce and soy powder.

It is better to buy from government-subsidised farmers than pay the price, said an official with a local crusher.

The sale comes as the domestic market has been flooded with imported soy, while seasonally low demand in January and February has led to negative margins for many crushers processing soy into soymeal and soyoil.

China has pledged to continue stockpiling soy this year to help boost farmer incomes.