August 5, 2010

China may issue subsidy for October soy reserves

The Chinese government is likely to continue subsidy policy for state reserve soy in October, with higher subsidy grants than the same period last year, analysts predicted.

China's homegrown soy was less consumed in recent years as a result of increasing use of cheaper soy imported from other countries. A majority of homegrown soy was purchased for the national reserve. But as profit in growing soy declines sharply, farmers are reluctant to plant the crop.

If the government does not grant subsidies, locally produced soy will be gradually marginalised on the market.

Due to unfavourable weather and decreasing planting area, China's soy output is predicted to decrease this year while prices may soar as a result.