China last week purchased 150,000 tonnes of soyaoil and 300,000 tonnes of soyabeans for state reserves, and could buy even more if prices are favourable, sources familiar with government purchases said on Tuesday. The purchases were in addition to earlier foreign buys by Beijing as it builds its soyaoil and soyabean reserves.
"It may buy more this week if prices are good," said a source. The price of the purchases was not immediately clear, but came as Chicago Board of Trade soya prices retreated from record highs hit in early March. Late last year, China bought 400,000 tonnes of soyaoil for its reserves - its largest purchase. It intends to build reserves of 1.5 million tonnes of soyaoil and 5 million tonnes of soyabean as a buffer against price swings and shortages.
Much of that volume could be purchased this year. Last month, China released 250,000 tonnes of soyaoil from reserves to crushers to fight inflation and shortages in the retail market. That oil has already been used by crushers.
It bought three to five cargoes of soyabeans from the United States and South America for May and June shipment, and two cargoes of soyaoil, either from the United States or Brazil, traders with international trading houses said. China's inflation hit a near 12-year high of 8.7 percent in February, driven mainly by rising food and agricultural product prices. March inflation is expected to have eased a little to 8.3 percent. The National Bureau of Statistics will announce major economic data for March and the first quarter on Wednesday.
DROUGHT, RAPESEED: China relies on imports for more than 60 percent of its oilseeds as it has limited land to increase planting, which could take land away for growing grains, deemed vital to the country's food security.
Corn farmers are likely to shift into growing more soyabeans and peanuts this year, said Wang Shoucong, a deputy director of the agricultural ministry "We will try to stabilise acreage for each crop but will make an effort to raise yields," he said.
The ministry earlier forecast the country's oilseed production, seen at 47 million tonnes this year, would meet 42 percent of its needs. In the largest soyabean area in the northeast, rains have not been enough to ease the drought over the past weeks. Farmers will start to plant the crop early next month.
"The rainfall (last week) was too small, not enough to ease the drought," Wang said. Wang also forecast the country's rapeseed output would fall slightly from last year to 11.5 million tonnes.