February 23, 2011

Feed producers grab most of China's weekly corn sales

China sold a total of 212,731 tonnes of corn from state reserves on Tuesday (Feb 22), with the majority going to feed mills in major consuming areas.

Sales in consuming areas totalled 208,190 tonnes at an average price of RMB1,960 (US$298) per tonne, up 1.7% from last week's price. Only selected big feed mills were allowed to bid.

Hog farms and feed users have been driving demand amid speculation that China's official corn reserves are at relatively low historical levels.

While Beijing is releasing state reserves to cover deficits and cool food price rises, the government is also buying corn from farmers in the northeast to refill its falling stocks.

Major corn processors have not resumed their purchases after they were ordered to stop buying from farmers to make way for state purchases, the China National Grain and Oils Information Centre said in a report.

The government has been selling corn from its temporary reserves since 2009, with a total of 51.22 million tonnes sold, according to sources.

In a semi-monthly soy auction in Anhui province on Tuesday, only 6,106 tonnes or 2% were sold out of 299,072 tonnes offered. Total sales since December were only 11,106 tonnes due to rising imports and high bidding prices set by the government.