July 11, 2007

Agriculture ministry: China should up soybean acreage to meet vegetable oil demand

China should increase soybean acreage to meet rising demand for vegetable oil, the People's Daily reported Wednesday (Jul 11), citing Agricultural Minister Sun Zhengcai.

"We should guide farmers in major producing regions to expand soybean acreage...as there is a big gap between demand and supply for vegetable oil," Sun was quoted as saying.

However, this should not conflict with the country's target of a grain output capacity of 500 million tonnes by 2010, he said.

To meet this goal, China has been trying to prevent its grain acreage falling below 120 million hectares.

The country's grain output exceeded 490 million tonnes in 2006, and the Ministry of Agriculture said in June that output is likely to grow for a fourth straight year in 2007.

Retail soyoil prices have risen 10 percent to RMB9.5/litre so far from the start of this year, according to data from the Ministry of Commerce.

Meanwhile, as China's grain supply and demand will be tightly balanced during a fairly long period, the country will strictly control the development of grain-based ethanol fuel, he said.

China has been reining in burgeoning demand for corn to make ethanol, and the National Development and Reform Commission said earlier it would issue regulations as early as this month to limit the use of corn in industrial applications.