Beijing, Nov 6 - Beijing has urged vegetable oil producers to boost supplies in an effort to lessen the impact of the commodity's record prices on inflation, which is hovering near 10-year highs.
The National Development and Reform Commission (NDRC), the country's top planning body, asked big edible oil manufacturers to step up production and help stabilise prices at a meeting on Monday, the commission said on its Web site.
"Price increases must be kept within reasonable levels," said the commission.
China's consumer price index rose by 6.2 percent in September, down from a decade-high 6.5 percent inflation level in August. But researchers warned prices might resume their rapid climb in coming months.
The appeal came as domestic vegetable oils prices, including soyoil and rapeseed oil, hit record highs last week, due to soaring international prices for edible oils as well as for oilseed and freight rates that have added costs to bring them to China.
Refined soyoil prices rose 10 percent to more than 9,700 yuan ($1,301) per tonne this week from early October.
Oil companies should not reduce supplies by any means including hoarding raw materials, monopolizing supplies or restricting production, it said.
China, the world's largest consumer of vegetable oils, has to import palmoil, soybeans and soyoil to cover the rising demand at home.
But many crushing plants were hesitating to buy more foreign soybeans as high costs for imports squeeze profit margins despite rising domestic oil and meal prices.
"The meeting does not really help," said an analyst with a government think-tank. "Both soyoil futures and physical prices climbed further today."
Dalian soyoil prices rose across the board on Tuesday morning. The January 2008 contract gained the most and was traded at 9,380 yuan per tonne by 0258 GMT, up 140 yuan from Monday.
Domestic vegetable oils prices have been in an upward trend following a short respite in September when Beijing sold its reserves to calm the market ahead of the National Day holiday at the start of October.
Traders said Beijing was considering cutting import duties for vegetable oils. But analysts said the commission feared that tax change would lead to further price rise internationally.