In addition to two batches of reserve-oriented rapeseed procurement (600,000 MT and 750,000 MT) in 2008, the government has recently decided to procure 150,000 MT rapeseeds in the Northwest for state reserve. Because of the small amount of procurement of the third batch and the area of procurement restricted to the Northwest, the government’s new move has little impact on the market price.
Drought is serious in China currently, but the major rapeseed-producing regions in Hubei, Sichuan and Hunan are not heavily affected. Only part of Anhui and Jiangsu has been affected noticeably.
According to a planting intention survey made by the Ministry of Agriculture, China’s winter-planted rapeseed acreage was more than 6.6 million ha. in late 2008, an increase of 13.8% on the year-on-year basis. Taking into account of the impact of drought on rapeseed yield, the expansion of rapeseed acreage can still ensure a production increase this year, likely to lead to a downslope rapeseed price this year.
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