December 2nd, Beijing Hui Fu Grain and Oil Group known as the top 500 Chinese enterprises suspended the production of edible oil. On this day, the National Development and Reform Commission (NDRC) negotiated with four large-scale edible oil producers to stabilize prices and ensure supply during the two festivals period.
An insider told reporters that Hui Fu's suspension was obviously a response to the price limit policy. Currently, there is an inverted situation in domestic edible oil prices, and enterprises will lose hundreds of yuan for every ton of oil produced.
Currently, Hui Fu's suspension may just be the beginning. In 2008, due to a sharp rise in edible oil prices, the state also implemented temporary price intervention measures. As a result, at that time, the government limited prices, enterprises limited production, and the market experienced shortages. Some insiders who were interviewed analyzed that if the market remains unchanged, within one month, the number of enterprises in the edible oil industry suspending or limiting production will significantly increase. And it is precisely the peak season for edible oil sales before the Spring Festival. If relevant decision-making departments cannot come up with good solutions, the consequences will be unimaginable.