June 15, 2011

China failed to sell any of the 300,000 tonnes of soy reserves it offered at an auction Tuesday (Jun 14) after failures in the past several auctions, according to the National Grain and Oil Trade Centre.

The floor price at the auction was set at RMB3,960 (US$611)/tonne, losing advantage over purchase prices of RMB3,820-3,840 (US$589-592)/tonne in major producing areas and import prices of RMB3,960-4,000 (US$611-617)/tonne.

This is the 13th batch of state soy reserves put under the hammer since December of last year. Due to unappealing floor prices, China only sold out 11,100 tonnes of about 3.86 million tonnes of reserve soy at these auctions.

Although soymeal demand has started to improve recently, domestic soy market remains weak amid uncertainties about rapeseed purchase policies as well as whether the government will extend the price capping policy for edible oil.