Chinese Government Moves Throw Domestic Soybean Market Into Disarray
The domestic Chinese soybean market has been thrown into disarray by the government's plans to shore up prices by buying up to 3 million tonnes from local farmers, trader say.
Crushers say that the price being paid by the government is around 1,000 yuan ($145.90/tonne) higher than the price of imported soybeans from the US. Consequently local farmers will not sell to the crushers unless they match the government price. This has brought trade to a standstill as crushers consider whether to import US beans.
Heilongjiang province, China's largest producing region, grows only non-GMO sybeans however, and crushers are worried that the government might impose some kind of import restriction on GMO soybean imports.
"This leaves the crushers caught between a rock and a hard place," said one trader. "They can't afford to match the government's price, yet if they do sign import deals then they still might not be able to take delivery of US beans once they arrive."
But it's not just the crushers who are complaining.
Farmers are scrambling with each other to take advantage of the government scheme. Heilongjiang is expected to produce almost 9 million tonnes of soybeans this year. With the government having already bought one million tonnes, and set to buy a further 1-2 million in the province, where is the rest going to go if the crushers buy imported beans?
Crushers say that the price being paid by the government is around 1,000 yuan ($145.90/tonne) higher than the price of imported soybeans from the US. Consequently local farmers will not sell to the crushers unless they match the government price. This has brought trade to a standstill as crushers consider whether to import US beans.
Heilongjiang province, China's largest producing region, grows only non-GMO sybeans however, and crushers are worried that the government might impose some kind of import restriction on GMO soybean imports.
"This leaves the crushers caught between a rock and a hard place," said one trader. "They can't afford to match the government's price, yet if they do sign import deals then they still might not be able to take delivery of US beans once they arrive."
But it's not just the crushers who are complaining.
Farmers are scrambling with each other to take advantage of the government scheme. Heilongjiang is expected to produce almost 9 million tonnes of soybeans this year. With the government having already bought one million tonnes, and set to buy a further 1-2 million in the province, where is the rest going to go if the crushers buy imported beans?
