May 9, 2012

China's sells 68,328 tonnes soy reserves

As lower state prices prompted crushers to stock up on soy, China was able to sell 68,328 tonnes of the oilseed from state reserves at a regular auction on Tuesday (May 8), the biggest volume since late 2010.

Volumes from state sales may jump further in the coming months as rising CBOT soy prices, supported by a drought-reduced South American crop, are expected to boost prices for imported soy to more than RMB4,500 (US$713) per tonne next month, traders said.

Crushers in the provinces of Shandong and Hebei bought 68,328 tonnes of soy at an average price of RMB3,946 (US$630) per tonne, according to an official website. A total of 299,478 tonnes of soy was offered at the auction, held twice a month since December 2010.

The price at the auction was 10% lower than that for imported soy which was offered at about RMB4,400 (US$698) per tonne at ports in Shandong province.

The single sale volume was higher than accumulated sales in auctions since 2010 totalling 67,600 tonnes. However, it was just a fraction of China's monthly imports of between 4-5 million tonnes.

The government held between 3-4 million tonnes of old stocks of soy from harvests as far as 2008, according to traders' estimates. Besides, the government also stockpiled 3.5 million tonnes from its 2011 harvest, the China National Grain and Oils Information Center said.