December 4, 2006

Low soy import prices threaten Chinese farmers

Chinese farmers have been a worried lot, thanks to declining soy prices in the market.

The country imported about 23.5 million tonnes of soy during Jan-Oct, up 9.7 percent over the same period last year, as the price of imports dropped 12.2 percent to US$261 per tonne.

The cheap soy imports have been putting pressure on local farmers who are having difficulty competing.

With their price advantage undercut, Heilongjiang farmers have been reporting poor sales of home-grown soy.

A report by China Customs confirms the negative impact of low-priced soy on the domestic planting and processing sectors.

On the other hand, imports from foreign-funded firms amounted to 14.15 million tonnes, up 22.1 percent, per report. The country's soy growing area would shrink with the output likely to drop by 2.7 percent to 15.9 million tonnes in 2006.

Statistics shows China imports 45 percent of its soy from Brazil, 30 percent from the US and 23 percent from Argentina.

The report raised the spectre of a stranglehold by foreign companies over soy resources and warned of a threat to national grain security.