A large inventory will not be the new normal for China’s grain sector, even though combined stocks have remained at historic highs, a senior official said as authorities prepared to encourage more private enterprise participation in the annual grain purchase arrangement. Ren Zhengxiao, head of the State Administration of Grain, said at a news conference on Tuesday [26 April 2016] that there are no signs of consistency or stability in the country’s large grain inventory, which could be reduced promptly if there were to be a sudden decrease in production or resurgence in economic growth…Full Article: ECNS.cn Apr 2016

Key Points

  • In April 2016, the USDA noted China could suffer more than US$10 billion in losses relating from its shifting agriculture policy on its corn reserves.
  • In March 2016, China reportedly had approximately 250 million MTs of corn in its state reserves.

ChinaAg Comments

  • In April 2016, China’s Ministry of Agriculture stated it would increase the country’s soybean production at the expense of corn. Chinese corn farmers Liaoning, Jilin, Heilongjiang, and Inner Mongolia will reportedly receive corn production subsidies. The Ministry of Agriculture also noted that soybean production will be promoted on farmland that has historically grown soybeans.
  • In March 2016, China announced that it would end its state corn stockpiling program (began in 2008).
  • As of 2015, China’s northeast (e.g. Heilongjiang, Liaoning, Jilin and Inner Mongolia) had approximately 160 million MTs of corn in storage, or roughly 78% of China’s total corn reserves.
  • In September 2015, China decreased its corn purchasing price for state reserves by 10.7%, marking it the first decline since price support measures would introduced in 2008.

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