China has started to stockpile soybeans every year since 2008 in order to boost State inventories and stabilize market prices.
"The offering of a price that is higher than that of last year is intended to stimulate the enthusiasm of farmers and stabilize domestic production of soybeans as China has seen continuous decline in the growing area and output of soybeans in recent years," Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultants, told the Global Times Wednesday.
China's soybean output will drop by 11.6 percent from 2011 to 12.8 million tons in 2012, as the soybean growing area in the country has shrunk by 14.43 percent from last year to 6.75 million hectares this year, according to a report by the China National Grain and Oils Information Center (CNGOIC) last month.
With the decline in output, the country increasingly relies on soybean imports.
The imports are expected to reach 57.5 million tons by the end of the year, up 9.3 percent from 2011, according to CNGOIC's report.
"The reliance on imports means China has lost pricing power over soybeans in the international market. China should continue to encourage soybean producers and at the same time develop alternatives such as growing corn and palm trees to ensure the grease supply," said Ma at Beijing Orient Agribusiness Consultants.
The SAG also announced Wednesday it would stockpile corn and pay farmers between 2,100 and 2,140 yuan per ton.
Landmark building should respect the public's feeling