September 6, 2010

China may release soy reserves this year

China, the world's biggest soy importer, may sell some of its state stockpiles to local crushers this year, said Li Qiang, managing director at Shanghai JC Intelligence Co.

Processors have been unable so far to reach an agreement with government finance officials on the sale, Li said Friday (Aug 3). The beans are old and deteriorating, so should reserves not be released this year, they will have to be in the first half of 2011. Stockpiles may total five to six million tonnes, he said.

Sales may help cool local prices that have advanced 5.5% since June 30. China may increase imports by 5.8% to 55 million tonnes in 2010-2011, said Frank Zhou, general manager of soy trading, at Cargill Investment (China) Ltd.

Soy crushers in China's top-producing province of Heilongjiang are in talks with the local government to buy state inventories, an executive with direct knowledge of the matter said Aug 31.

Large processors met with the grain bureau to discuss details, said the executive. An agreement may be reached, with some estimating the quantity at 1.5 million tonnes, the executive said.

"China will certainly sell some stockpiles," said Shi Yongge, general manager at JiuSan Group (Tianjin) Co. The government is receiving input from crushers before making a decision, he added. The country's soy output may increase to 15.6 million tonnes this year, a gain of 1.6 million tonnes, Li said.