May 25, 2012

China's reserve auctions sell 188,410 tonnes soy

Out of 605,356 tonnes of the reserve soy China offered at an auction on Thursday (May 23), it was able to sell out a total of 188,410 tonnes or 31.12%, according to the National Grain and Oil Trade Center.

Some 164,282 tonnes were sold in Heilongjiang province and Inner Mongolia Autonomous Region, accounting for 54.7% of the offered 300,343 tonnes, while 24,128 tonnes or 7.91% of the planned 305,013 tonnes of soy were sold from state reserves in the provinces of Hebei, Shandong, Jiangxi, and Zhejiang.

The transaction rate at the reserve soy auctions increased significantly compared with 23% on May 8 and 11.46% on April 24.

The base auction price of RMB3,800/tonne (US$599) was appealing to oil-crushing mills as purchase prices in major producing areas have already reached RMB4,100/tonne (US$646).

Meanwhile, tight supply of domestic soy also pushed crushers to turn to state reserves.

The improving transactions at the auctions are expected to ease supply and help stabilize edible oil prices.