The strange phenomenon of rapeseed purchasing gradually fades: oil mills won't buy, farmers won't sell

According to the spirit of the "Notice on Doing a Good Job in the 2015 Rapeseed Purchase Work" issued by five departments including the National Development and Reform Commission, major rapeseed-producing areas such as Hubei Province have recently begun to deploy rapeseed purchasing work one after another. This marks the final implementation of the 2015 new-crop rapeseed purchasing policy.

After the policy was implemented, what was the situation regarding farmers in producing areas selling and oil mills purchasing new-crop rapeseed?

“Farmers have begun to sell new-crop rapeseed in large quantities. First, the purchasing policy has been clarified, and waiting any longer would hardly bring more market opportunities; second, as temperatures gradually rise, it becomes harder for farmers to store rapeseed; third, early rice has entered the harvest period, and it is urgent to free up warehouse space for new rice coming to market.” Liu Lei, manager of the relevant agricultural products department, told reporters.

Judging from measures related to the 2015 rapeseed purchasing work released by major producing areas such as Hubei, this year's new-crop rapeseed purchase price is mainly formed by the market, farmers sell independently, oil mills and traders purchase independently, and the temporary storage policy has exited.

According to reporters' understanding, as this year's new-crop rapeseed was about to be harvested and come to market, relevant departments clarified this year's rapeseed purchasing policy on May 19. The government-led bottom-line open-ended purchasing implemented in previous years was no longer carried out, and it was replaced by a purchase subsidy policy, with the specific purchase price and subsidy rules decided by local governments. Subsequently, local governments were slow to announce the specific purchase price and subsidy rules for new-crop rapeseed, causing the market to generally adopt a wait-and-see attitude after a large amount of new-crop rapeseed was harvested. In many producing areas, trading was sluggish during the peak rapeseed marketing season, and the strange situation of “oil mills won't buy, farmers won't sell” appeared.

Wang Hongwei, a grain and oil trader in Jingzhou, Hubei, told reporters that because there was no government bottom-line purchasing, the price of new-crop rapeseed fell all the way after it came to market this year. For example, in some producing areas in Hubei, the opening price of new-crop rapeseed was only about 1.6 yuan/jin, far below last year's mainstream market price of 2.55 yuan/jin. “Faced with such a large price gap, farmers in producing areas naturally have a strong reluctance to sell, and some farmers would rather keep new-crop rapeseed at home and watch it mold than sell it cheaply.”

From the perspective of oil mills, Wang Hongwei said, prices of rapeseed meal and rapeseed oil both fell, sales were sluggish, and many oil mills were short of funds, so even if the price of new-crop rapeseed was very low, many oil mills could do nothing. Based on the current ex-factory prices of rapeseed oil and rapeseed meal, the price of rapeseed delivered to the mill that oil mills can accept is less than 1.7 yuan/jin.

During interviews, reporters learned that after local governments in major producing areas announced subsidy rules for new-crop rapeseed, the market situation quickly changed. This was mainly shown by farmers' reluctance to sell continuously weakening, and they accelerated the pace of selling rapeseed one after another. At the same time, the enthusiasm of oil mills and traders for purchasing rapeseed increased somewhat, and some oil mills also used price differences in rapeseed among different regions to engage in trade.

According to Liu Lei, the COFCO branch located in Huanggang, Hubei, has purchased more than 20,000 tons of rapeseed. Other large oil mills such as COFCO Xiangrui and Wuhan Yihai have also purchased thousands of tons of rapeseed. Flexible operators such as Hubei Hongkai, in addition to purchasing rapeseed for their own use, also sold large amounts of rapeseed meal to Hunan, Sichuan and other places, which is conducive to further enlivening the market.