July 28, 2008

 

China may close out 200,000 tonnes of soy oil reserves

   
  

The Chinese central government may close out more than 200,000 tonnes of soy oil reserves in order to meet market demand, causing soy oil futures to slump at Dalian Commodity Exchange, one of the four futures exchanges in China.

 

A report said China is likely to sell its reserves to curb domestic inflation and rising oil prices, having bought more than 400,000 tonnes of soy oil and 1 million tonnes of soybeans for reserves recently.

 

It is also said that three food giants-China National Cereals, Oils & Foodstuffs Import and Export Corporation (COFCO), Yihai Kerry Group and Heilongjiang Jiusan Oil & Fat Co. Ltd.-will offer small edible oil packages to the market.

 

However, the three companies said last Wednesday (July 23) that they have yet to be notified formally by the central government.

 

Beijing Orient Agribusiness Consultant Ltd. General Manager Huang Dejun said he was uncertain that the government would close out soy oil reserves because domestic supplies were adequate in recent weeks and prices are falling this month.

 

On July 23 last week, the price of first-grade soy oil in the Chinese market was about RMB 11,000 a tonne, but turnover was low due to falling soy oil prices this week.

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