November 28, 2008

Industry insider calls for China to raise soy import duty


China should raise the soy import duty to narrow the price differences between imported and home soy so as to curb the import volume, an industry insider suggested.


The customs statistics showed that China's soy import volume reached 37.82 million tonnes in crop year of 2007-2008, an increase of 9.09 million tonnes or 31.6 percent from the previous year.


The price of imported soy is far lower than that of domestic soy, and even less than planting cost of the latter, which has seriously damaged China's soy industry and the benefit of China's soy farmers as well.


Liu Denggao, deputy president of China Soy Industry Association (CSIA), said in an interview with Xinhua-run Shanghai Security News that China should continue strengthen policy control to solve the sluggish sales of soy produced in North-east China.


To stabilize soy market and protect farmers' benefit, China launched the purchase of 1.5 million tonnes for state reserve in October at price of RMB0.925 per kilogramme, close to the production cost of soy, with 10 million tonnes in Heilongjiang, 60,000 tonnes in Liaoning, 210,000 tonnes in Jilin, and 230,000 tonnes in Inner Mongolia Autonomous Region.


Liu said that China's soy industry must be revitalized especially in major soy producing areas such as North-east China and the Inner Mongolia Autonomous Region to guarantee the country's soy output and quality, and to stabilize processing industries.


One approach to vitalize the industry is to make full use of its advantage in non-GM soy, develop brand products and explore new market.


As non-GM is mainly used in food industry, China may channel home soy for producing edible high protein, while importing soy for oil and meal.


Liu said that soy processing enterprises might make joint efforts to develop non-GM products and explore international market.


China exported a small quantity of non-GM soy overseas at the beginning of this year at the price of RMB 6,800 per tonne, much higher than the import price of GM soy which was RMB4,300 per tonne.


The soy market will develop by leaps and bounds if China develops its brand in non-GM soy, Liu noted.


Because imported soy is used for crushing oil and producing feedstuff, it serves as supplement for domestic soy, and enriches Chinese soy market. Liu also suggested that processing enterprises set up storage facilities with state subsidies to promote soy circulation and purchase.


With RMB2.5 million subsidies, Liu noted, soy-processing companies can digest 5 million tonnes of soy at price of RMB0.925 per kilogramme, thus greatly accelerating soy sales in north-eastern areas.


Liu predicted the dry climate in South America this year would affect soy output in the next crop year and push up soy price in the first 2 months of 2009. Therefore, China should take further steps in state purchase for long-term benefits.


US$1 = RMB6.831 (Nov 28)

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