February 22, 2011

 

China dismisses proposal of soy import tax cut

 

Chinese authorities have reportedly rejected a proposal to cut soy and soyoil import tariffs, according to reports.

 

Senior officials with China's commerce ministry have mentioned the reduction at an internal meeting as part of efforts to reduce the trade imbalance, but no official proposal was made to the State Council or finance ministry, which are the authorities that would normally approve such cuts, an industry source said.

 

Talk of a lower soyoil tax had pressured Dalian futures prices and drove up the CBOT soy prices last week.

 

Any possible tax cut by China would not drive down Chicago prices and subsidies offered to Chinese crushers would help Beijing cool food inflation, sources said.

 

A tax cut was not necessary due to the current large stockpile of both imported and domestic soy, analysts said.

 

China, the world's top soy buyer, imported a record 54.8 million tonnes in 2010.