Beijing, March 9 - Although a supply shortage has raised China's soyoil prices by almost 30% this year, Beijing will combat any further increases by releasing more reserves rather than cutting tariffs, a senior official said Sunday.
The supply of overall edible domestic oil is not "so tight that it needs special measures from the government" such as a cut in import tariffs to curb prices, assistant commerce minister Huang Hai told Dow Jones Newswires.
There have been rumors in the market that Beijing was likely to cut the import tariff rate on edible oils because of global supply tightness that has led to shortages in China. A drop in China's oilseed output has aggravated the problem.
"We have the ability to increase the supply of edible oil, as we have reserves," Huang said on the sidelines of the annual meeting of China's political advisory body.
Huang said the government has been releasing reserves of soyoil into the market and will increase the supply if prices keep rising.
Huang said the supply of other edible oils is secure and customers will adjust consumption habits if soyoil stays high, although soyoil accounts for 36% of China's total edible oil consumption.
China's soyoil prices have surged to CNY14,000 per ton recently, compared to around CNY11,000 near the end of 2007 late last year.
China has been saying it will expand the state reserves of soybeans and soyoil to strengthen the government's control over market prices.
Huang said the government is still trying to determine how much soyoil and soybeans it should keep in its state reserve stockpile.