China's grain authority in the top soya province of Heilongjiang has met with local crushers to seek their advise on sales of state soya reserves, local crusher officials said on Wednesday. But no decision was made on whether Beijing would continue to offer subsidies to these plants as they did last year or to sell these reserves at weekly auctions, they said.
Beijing last year offered 210 yuan ($30.85) per tonne to some soya crushers in the north-eastern provinces, including Heilongjiang, on 1.95 million tonnes of state reserves, after its weekly auctions attracted few buyers. The sales had not disrupted imports much because crushers along the coastal areas who have easy access to imported soya could not get government subsidies and were not interested in the expensive reserves.
"At the meeting, they ask us what prices we could accept to buy state reserves," said the manager with a major crusher in Heilongjiang, which also joined the meeting. "The government may have to offer subsidies if it wants to sell to us. The beans were getting costly after being stored for such a long time," said the manager.
In order to boost farmers' incomes, Beijing stockpiled soyabeans at a higher price or 3,740 yuan per tonne in 2009 and at 3,740 yuan per tonne in 2008 from farmers, together with storage and transportation costs, the cost of these beans could hit 4,000 yuan per tonne, traders said. The government did not publish its soya reserve numbers, but traders estimated its reserves of domestic soyabeans were at about 4 million tonnes.
US forward-month cargoes were priced about 3 percent cheaper or 3,900 yuan per tonne, they said. The government has to decide and release some of the reserves to make space for new harvests due in about one month as it would continue to stockpile the crop to shore up domestic prices, analysts said.
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