The corn harvest is in full swing in north China. This year, however, the government ceased its corn reserve purchasing program, which had protected the corn price to ensure farmers continue to grow the staple grain, causing the corn price to drop. At a grain market in Jiamusi, a city in the northeastern province of Heilongjiang, buyers can purchase corn for between 1,240 yuan ($183) and 1,320 yuan [~US$195] per ton, which is roughly 500 yuan [~US$74] less than the same period last year…Full Article: China Daily Nov 2016

Key Point

  • China’s national corn reserves total approximately 275 million MTs (125 million MTs from 2015 and 150 million MTs from 2014).

ChinaAg Comments

  • In October 2016, a Beijing publication stated that the average corn price paid by ethanol companies in Jilin Province was CNY 1,450 (US$217.44) per MT. At the same time, the purchase price paid by ethanol companies in Kaiyuan, Liaoning Province, was CNY 1,570 [~US$233] per MT. The publication also noted that from 2007 to 2014, corn purchase price in Heilongjiang Province increased from CNY 1,380 [~US$181.32] per MT to CNY 2,200 [~US$357.42] per MT, before falling to CNY 2,000 [~US$318.35] per MT in 2015. In general, corn imports from the USA total just CNY 1,500 [~US$221.90] per MT.
  • In April 2016, China’s Ministry of Agriculture announced it would increase soybean production at the expense of corn production. The Ministry of Agriculture also noted that soybean production will be promoted on farmland that has historically grown soybeans (e.g. Heilongjiang Province).
  • In March 2016, China’s National Development and Reform Commission (NDRC) announced it would end the country’s corn stockpiling program in 2016. During the same month, China reportedly had approximately 250 million MTs of corn in its state reserves.
  • 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 November 2015, China announced plans to cut its corn production by 3.3 million hectares across 13 provinces/regions by the end of 2020. This decline in area will cut production by approximately 25 million MTs. According the Deputy Director of China’s Crop Production Department (under the auspices of the Ministry of Agriculture), the major corn producing regions of Liaoning, Jilin and Heilongjiang will see the largest declines in production area, while Shanxi, Shaanxi, Gansu, Guizhou and Yunnan will also be affected somewhat.
  • 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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