China to crack down on corn speculation

15:37, August 20, 2010      

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Responding to the rumors that China's corn resources are dangerously low, Shang Qiangmin, director of the National Grain and Oil Trade Center, said on Aug. 19 that China does not have insufficient corn this year, and that China will resolutely crack down on corn speculation

Due to drought, the corn output in northeast China was largely reduced in 2009, leading to some changes in the domestic corn market. Driven by bullish expectations, the corn price has had a higher increase rate. Shang said the view of imbalanced corn supply and demand is a misjudgment of the market situation.

"The hoarding and speculation are the main reasons for the strong demand in the northeast area," Shang said.

Shang also said that currently, China has abundant corn supply and sufficient corn stocks. China has enough ability and determination in market regulation. The National Grain and Oil Trade Center will have 2 million tons of stored corn up for auction this week, which has proven China's determination and strength in regulations.

In 2008, China's corn yield output reached 166 million tons, achieving a record high. In 2008 and 2009, over 36 million tons of temporary stored corn was purchased in four provinces of northeastern China, and in 2010, the newly-increased corn supply is roughly equivalent to domestic consumption. Therefore, China will not have a corn shortage this year.

The latest statistics from the National Grain and Oil Trade Center show that by the end of July 2010, the corn commodity stocks of state-owned grain enterprises, non-state-owned grain enterprises and the major conversion grain enterprises of the four provinces in northeastern China increased more than 5.1 million tons compared with 2009. Although the national stocks reduced with sales, the total supply did not reduce because of the increase in enterprises' stocks.

Shang said that China now has sufficient stocks of corns and is determined to crack down on hoarding and price gouging. Therefore, the National Grain and Oil Trade Center will continually supply temporary corn reserves, state corn reserves and local corn reserves to ensure the stability of the domestic corn market in China.

By People's Daily Online


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