Chinese experts call for government support for domestic soybean market against large capital flow from foreign grain traders in Beijing today.
On Jan. 4, General Administration of Customs (GAC) posted an online warning against increasing control of foreign companies over the country's grain sector, saying the Singapore-based grain giant Wilmar International has been attempting to grasp China's soybean market.
"The company is marching into the northeastern soybean production base with large funds," GAC said.
Wilmar International is the major shareholder of Arawana, a household name of edible oil in the country. It was reported in last August that the grain processor bought soybeans worth US$3 billion in the northeastern region. The company didn't confirm the news.
Its year report showed the company's sales in China took up more than 50 percent of the total revenue in 2007, expanding more than 200 percent year-on-year to US$8.48 billion.
Li Guoxiang, researcher on rural development with the Chinese Academy of Social Sciences, said the interests of domestic grain companies and farmers have already been affected as foreign grain traders put edible oil pricing under their control.
Statistics showed 64 of the 97 major edible oil companies in China have overseas capitals.
Li suggested government reinforce interference of the country's grain market. "We should not only support large national grain companies, but also take actions to help small and medium sized companies grow, such as make more loans."
Xu Xianglin, an expert on rural issues at the Party School of the Communist Party of China Central Committee, also urged the government to keep a cautious watch over the presence of foreign capitals in domestic grain circulations.
"Apart from state-owned grain enterprises, we could include the nation's private-owned companies in the purchase and reserve of grain products so as to avoid foreign traders buying up our food," he said.
(Xinhua News Agency January 6, 2009)
