June1, 2009
China plans to purchase rapeseed from local farmers at RMB3,700 a tonne to help the domestic market weather the economic downturn, the National Development and Reform Commission said in a statement Sunday (May 31).
China Grain Reserves Corp. will mainly be responsible for the purchase, including designating its direct branches and some state-owned grain and oil companies to conduct the purchase, said NDRC, the country's economic planner in the statement.
The government buying will be conducted in seventeen rapeseed producing areas, including Hubei, Sichuan, Anhui, Jiangsu, Hunan, Guizhou, Jiangxi, Qinghai, Shaanxi, Zhejiang, Gansu, Chongqing, Inner Mongolia, Yunnan, Xinjiang, and Tibet, said the NDRC statement.
The purchase in winter planting areas will start June 1 till the end of September while spring planting areas' buying will begin on Sept. 1 till the end of December, said NDRC, without elaborating what are winter planting and spring planting areas.
Meanwhile, the government will also ask some state-owned oil-fat processing plants to buy rapeseeds from farmers so that these plants can produce vegetable oil by processing the rapeseeds and sell it to the market, another way to help shore up domestic rapeseed prices, according to the statement.
Consequently, Beijing will give those oil-fat processing plants subsidies of RMB200/tonne till rapeseed prices recover to RMB4,000/tonne, said the statement.
The NDRC didn't specify the volume of rapeseed Beijing wants to purchase from farmers.
The cost of imported rapeseed is around RMB4,200/tonne, while domestic old-crop rapeseed prices are at RMB3,400-RMB3,600/tonne, said analysts.
At RMB3,700/tonne, farmers' producing costs for rapeseed can basically be met, said an oilseed manager at a COFCO Ltd. branch.
Rapeseed output last year was 12.1 million tonnes, according to statistic bureau's latest data.
China National Grain and Oils Information Centre expects the country's rapeseed output this year to be 13 million tonnes.
