A report that China may cut import tariffs on some food commodities in a further effort to combat inflation helped send grain and soybean  futures sharply higher on Thursday morning.
China's Ministry of Commerce (MOC) is mulling cuts to import tariffs on a variety of goods including key foodstuffs such as soybeans and soyoil, sources familiar with the move told Reuters News Service  on Thursday.
The MOC has reportedly solicited opinions from other government ministries on the tariff cuts.
Details of what tariff cuts are being considered are unclear, but trading firm Shanghai JC Intelligence Co. Ltd. cited a trader in Singapore as saying China may cut its soybean import tax to 1%, from 3%, and cut its soyoil import tax to 5%, from 9%.
Details are still being discussed by China’s various ministries, however, and the final plan would need approval from China's cabinet before it could become reality.
Officials from China's commerce and finance ministries declined to comment on the matter, Reuters said.
China’s Dalian soyoil futures fell overnight on speculation that the tariff cuts would boost Chinese imports of both soybeans and soyoil. In contrast, Malaysian palm oil futures fell on fears palm oil duties would not be cut.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.