April 28, 2012

According to three people with knowledge of the matter, China plans to increase the amount the government pays farmers for the oilseed by more than 8%.

The plan was submitted to Finance Ministry and National Development and Reform Commission officials in Beijing Wednesday (Apr 25), said the people, who declined to be identified because the information hasn't been made public. Farmers may get CNY5,000 (US$793) a tonne, from CNY4,600 (US$730) last year, for rapeseed sold into state inventories, they said.

China has been stockpiling rapeseed to boost prices and encourage more production as farmers switch to more profitable crops such as wheat or move to cities to work. The proposed increase in the amount paid to farmers still need the approval of the State Council, the people said. Officials at the ministry and commission, the nation's top economic planning agency, declined to comment when contacted by phone and fax Thursday (Apr 26).

The country may import two million tonnes of rapeseed this year, 59% more than in 2011, Grain.gov.cn, a unit of the state-controlled China National Grain & Oils Information Centre, said in a report April 24. First-quarter imports rose fourfold from a year earlier, customs data show. Canada is the world's biggest supplier of the oilseed.

Crude rapeseed oil for September delivery rose as much as 1.1% to CNY10,732 (US$1,703) a tonne on the Zhengzhou Commodity Exchange Thursday (Apr 26), and closed at CNY10,692 (US$1,697).