The State Grain & Oil Information Center has recently issued a notice, saying that 500,000 MT state soybean reserve, consisting of 300,000 MT in Heilongjiang, 100,000 MT in Liaoning and 100,000 MT in Jilin, is to be put to auction from July 23 on.
It is rumored that the soybean auction base price may be RMB3,750/MT, higher than the procurement cost by RMB50/MT which is the cost of procurement and shipment. The storage cost is shouldered by the government.
BOABC predicts that such a price can hardly attract buyers. The current soybean market price is merely RMB3,550/MT in the Northeast, cheaper than the state reserve to be put to auction. Coastal crushers have to pay a shipment price of RMB150 ~ 200/MT in addition to the auction price of RMB3,750/MT. Their total cost of soybean purchase from auctions would be RMB3,900 ~ 3,950/MT, above imported soybeans’ price of RMB3,850/MT.
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