The government will ramp up soybean production and guide development of the soybean processing industry to reduce reliance on imports, the National Development and Reform Commission (NDRC) said yesterday.

Last year, China imported 30.82 million tons of soybeans, accounting for 40.9 percent of the world's total soybean trade and pushing up the country's dependence on imports to 78.7 percent, according to a guideline for the soybean processing industry released yesterday by the NDRC.

Analysts said this heavy dependence on imports made the domestic grain market more vulnerable to international pricing volatility and contributed to the country's high CPI this year.

Wei Chaoan, vice-minister of agriculture, said earlier that the government would release preferential policies to spur farmers to boost soybean output.

This year, China's soybean planting area increased 1.06 million hectares from a year ago and will reach 9.65 million hectares. Output is expected to rise to 17.5 million metric tons, up 36.7 percent from 2007, the China National Grain and Oils Information Center said in a monthly forecast last month.

The country's efforts to develop new strains of high-yield soybean seeds and introduce advanced planting technologies are also expected to boost output, according to Han Tianfu, a researcher with the institute of crop science under the Chinese Academy of Agricultural Sciences.

Earlier reports said the average yield per unit of land in Heilongjiang province, a major soybean producer, is expected to increase by 25.4 percent from a year ago on good weather and improved technologies.

The government should also reduce soybean oil extraction capacity and upgrade the industrial structure to ensure sound development of the processing industry, the guideline said.

Rapid growth of the soybean extraction industry in the past few years led to excess production capacity of 77 million tons in 2007, but the operation rate across the industry was only 44.2 percent, the NDRC said.

The guideline stipulates soybean extraction capacity should be under 75 million tons a year by 2010, and further reduced to 65 million tons a year until 2012.

The NDRC also urged the soybean processing industry be upgraded through mergers and reform, and major soybean processors be set up in the coastal region.

The guideline also sets out stringent environment protection rules for soybean processors, requiring energy and water consumption be reduced by 15 and 30 percent respectively by 2012.

(China Daily September 4, 2008)