China sold less rapeseed oil in reserve auctions yesterday than in a previous sale as the government s price controls cut into profit margins, state- affiliated researcher Cnyouzhi.com said.
Buyers took 58 percent of the 99,700 metric tons on offer, the Hefei National Grain Trade Center, which held the auctions, said on its website. On Dec. 7, buyers took 75 percent of the same amount offered, Cnyouzhi.com said. The market believes the government will sell more vegetable oil before the New Year, it said.
China has sold reserve cooking oil and other food staples to ease inflation, which raced to the fastest in 28 months in November. Still, May-delivery rapeseed oil on the Zhengzhou Commodity Exchange has gained about 12 percent in the past month as traders bet price controls will ease after the peak- consumption period of Chinese New Year in February.
The decline in sell-through rate is a reflection of the curbing effects of government policies, said Cnyouzhi.com, owed by China Grain Reserves Corp. The government has sold oilseed products in smaller-than-expected quantities and in higher frequencies, indicating it may want to cap prices and not to force them lower, the researcher said.
The government is rumored to have prepared 300,000 tons of crude soybean oil for sale at 9,000 yuan a ton, Cnyouzhi.com said, without citing anyone.
Rapeseed oil for September delivery rose as much as 1.1 percent to 10,596 yuan a ton. On Nov. 10, futures touched 10,744 yuan a ton, the highest since July 2008.
Today s sales fetched an average price of 9,255 yuan ($1,390) a ton compared with the starting bid of 9,200 yuan, the Hefei Trade Center said. The sales on Dec. 7 were transacted at an average 9,223 yuan a ton, according to data compiled by Bloomberg News.
