Thursday, December 8, 2011

Northeast Production Area of Soybean Facing Crisis in Raw Material Purchase

The processing enterprises of soybean in Northeast China have been faced with crisis in soybean purchase owing to the reducing local planting area of soybean, according to CCM’s November issue of China Agriculture Investment Bimonthly Report.

According to the Soybean Association of Heilongjiang, at present, the processing enterprises of soybean have faced many difficulties in purchasing their raw material - soybean. The processing enterprises of soybean can not get soybean with low price while dare not to purchase with high price. Recently, in Heilongjiang Province, only a few processing enterprises of grease are purchasing soybean as raw material and more than 80% of the processing enterprises of grease have suspended their productions. The planting area of soybean has been continuously reducing in Heilongjiang Province, thus the soybean supply in Northeast China has begun to slip.

The processing enterprises of soybean have faced with difficulties in raw material purchasing and are with the risk of losing market share. At present, domestic soybean planting doesn't have any advantages, thus most of the farmers choose to plant other crops with higher benefits. If this trend keeps going on, the gap between supply and demand of soybean in Northeast will appear in the future. Recently, domestic supply of soybean has been in short, owing to the sharply decreased planting area and output of soybean. The planting area of soybean has been reduced year by year, decreasing to 3,667,000 ha. in 2009 from 4,246,000 ha. in 2005.

At the same time, many processing enterprises of soybean have suspended productions because of the difficulties of purchasing raw material and the poor performance. Take the largest enterprise of soybean oil in Hailun City, Heilongjiang for example, its production has been dependent on the national financial subsidies for many years, and this year the enterprise even suspends production. At present, the operation rates of soybean oil enterprises are low, and only half of the enterprises are producing.

The short supply of soybean has also brought influence to its consumer markets such as the soybean oil market and the soybean meal market. In the past, the northeast region marketed all its own soybean; but now, soybean oil and soybean meal produced in Huaihai Region are sold to the northeast region, which weakens the advantages that the northeast region once had in soybean production.

To solve this crisis, the government should take corresponding measures, such as policies on soybean purchase and temporary store; the stabilization of the price; offering tax preference to soybean enterprises, etc.

Source: China Agriculture Investment Bimonthly Report

Content of China Agriculture Investment Bimonthly Report:
China to become top import country of agricultural produces
Pilot of modern agricultural produces circulation achieves fruitful success in China
Northeast production area of soybean facing crisis in raw material purchase
Price update of agricultural produces
Nitrogen fertilizer industry to change production structure
Agricultural material logistics to see faster development in China
Legend Holdings views agriculture as new growth point
Price update of main fertilizers
ZARD to purchase Guangxi Green Agricultural 51% share
Chinese pesticide industry meets white-hot capital operation
Sinochem Corporation to launch IPO
Price review of key pesticides and materials in Nov. 2011
Tingyi-Asahi Beverage to establish strategic alliance with PepsiCo
New Administrative Regulations on Feed and Feed Additive to implement in China
Liquor industry to enter into a golden age in China
China's dairy enterprises actively raising funds in key development period
Price update of food and feed

China Agriculture Investment Bimonthly Report, which is a bi-monthly newsletter published by CCM International Limited, offers timely update and close follow up of Chinese agricultural industry, analyzing market data and trends, as well as related policies. Major columns include policy and legislation, industry dynamic, company dynamic and price update.

If you are interested in November issue of China Agriculture Investment Bimonthly Report, please do not hesitate to contact us by +86-20-37616606, or email us at

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