Tuesday, August 6, 2013

History of Soybean Reserve Purchases and Sales

On August 8, 2013, Chinese authorities plan to auction 500,000 metric tons of northeastern soybean reserves. The soybean stockpiling plans for each season and the results of the auctions are regularly announced, but there are no complete official statistics.

A July 23 Chinese microblog posting provides a chronology of the soybean stockpiling policy from 2008 to the present. The estimates have been organized in the table below:

Estimated purchases and sales
of Chinese soybean reserves
Year Purchased Purchase Price Sold
1000 mt RMB/mt 1000 mt
2008-09 6,830 3,700
2009-10 2,760* 3,740 2,090
2010-11 3,080* 3,800 2,665
2011-12 3,140* 4,000 16
2012-13 810* 4,600 3,758
imported 2012 3,180
Total 19,800 8,529
*=unofficial estimates from a Chinese microblog.

Purchases are not always reported precisely and the microblogger has reported unofficial estimates for most years. The government also imported 2.5-3.5 mmt of soybeans to add to reserves in 2012--the microblogger estimates the total at 3.18 mmt. Auction sales are reported on a web site (the volume actually sold often is much less than the amount offered). During 2010, authorities held special sales of more than 2.6 mmt of soybeans to a handful of processing companies at a discount price of 3500 yuan. They held 25 auctions during 2012 which reportedly sold 3.758 mmt of reserve soybeans.

Cumulative purchases of soybeans from 2008 to July 2013 totaled 19.8 mmt, but only 8.5 mmt were sold. Purchases exceeded sales by 11.3 mmt. This is consistent with a report in Futures Daily that soybean reserves totaled 12 mmt in September 2012. It's also very close to USDA's current estimate of 2012/13 ending stocks of 11.6 mmt.

This level of soybean reserves is about 90 percent of China's annual soybean production, but only 15 percent of its consumption. The table above indicates that additions of imported soybeans replaced most of the reserves sold into the market over the past year.

No comments: