China, the world’s biggest soybean consumer, will stockpile domestically harvested soy to help growers sell the crop, the State Administration of Grain said.
The government will buy from farmers in the northeast provinces at 4,000 yuan ($627) a metric ton from Nov. 23 to April 30, according to a circular on the website of the grain bureau, which manages the nation’s grain market. The government won’t limit the amount to be stockpiled, the circular said.
“The move, while long expected, still gives a lift to the market sagging from negative sentiment,” Cao Yanhui, a research manager at Guoxin Futures Co., said by phone from Dalian. Farmers will probably accept the price and the government may buy about 4 million to 5 million tons, she said.
Soybeans for January delivery jumped as much as 1.9 percent to $11.25 a bushel on the Chicago Board of Trade today and were at $11.24 a bushel at 5:27 p.m. Beijing time. Futures have slumped 7.8 percent this month on concerns the European debt crisis will curb global economic growth and curb demand for commodities.
Stockpiling the beans will probably boost imports temporarily because it shifts local supply to a later date, Cao said. China still has reserves of 4 million to 5 million tons of domestic beans stored in 2008 that must be sold in the first half of next year, countering the impact of stockpiling, analyst Monica Tu at Shanghai JC Intelligence Co. said in an interview last week.
— With assistance by William Bi