Papers defend edible oil stories

09:38, December 15, 2010      

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Two leading financial daily newspapers insisted Tuesday that their reports on edible oil shortages were truthful and accurate, in response to accusations leveled at them by the National Development and Reform Commission (NDRC), the country's top economic planner.

The NDRC announced Monday that national stores of raw materials of edible oil were abundant, production in the country was normal, and there were no foreseeable cooking oil shortages in the market. It said reports published by the Beijing-based China Times and several other newspapers on edible oil shortages were based on subjective speculation.

According to the announcement, China increased its imports of soybean, a major material used in the production of edible oil, by 11.6 million tons from January to November this year, an increase of 30.7 percent compared with the same period last year.

It also insisted that manufacturers were still able to make a reasonable profit based on the current market price of soybean, rejecting the China Times report's contention that "oil manufacturers in the country are losing money because of the price surge of the raw material and price controls by the NDRC."

A press officer of Sanhe Hopeful Grain &Oil Group Co, a Beijing-based cooking oil producer mentioned in the China Times report, told Beijing Evening News that the company halted production from December 1 to 8 for a facility overhaul, and that production has now resumed.

However, the China Times said in a statement Tuesday that it rejected the accusation, insisting that its report was based on data collected from investigations and interviews, and that they kept records confirming the truthfulness of the data.

The China Business News, another newspaper mentioned by the NDRC, published a similar statement defending its report.

Weng Ming, an expert in agricultural trade at the ChineseAcademy of Social Sciences, told the Global Times Tuesday that 70 percent of the soybean used to make edible oil is imported, and that its price is decided by the international market and cannot be controlled by any government body in China.

"If the cost of production and raw materials exceeds the price of edible oil in the market, then a production halt is possible," said Weng. "If that happens, the government should subsidize oil manufacturers for their production."

According to data from, an online business news portal, the current cost of edible oil made from soybean is between 10,300 and 10,400 yuan ($1,547) per ton. However, the current wholesale price for edible oil in China is between 9,700 and 9,900 yuan per ton. In other words, manufacturers lose about 500 yuan ($75) for every ton of edible oil produced.

Sources say that the NDRC held talks on price controls with four major edible oil manufacturers earlier this month. The manufacturers were asked not to raise their oil prices and report their daily production volumes to the NDRC to ensure stable market prices and supplies.

However, observers said that price control measures would not last long and that there might be a rise in prices after next year's sessions of the National People's Congress and the Chinese People's Political Consultative Conference.

Source: Global Times
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