July 28, 2010

China to expect tight corn market this year

China's corn market will be in a state of tight balance in 2010 as fodder-driven demand for corn is seen to outstrip supply, analysts predicted.

The demand for corn is increasing in China due to the expansion of livestock feed industry. However, as corn stocks decline, the conflicts between corn demand and supply in the future will be acute in some regions, experts said.

During the period from July 2 to 20, China auctioned 23.45 million tonnes of state reserve corn and redistributed 8.49 million tonnes of state reserve corn among corn storages in different provinces. Furthermore, some 5.77 million tonnes of corn from the central government reserves and 600,000 tonnes of corn from local reserves were allocated to food manufacturers.

The recent commitment by the government to stick to active fiscal policies and moderately loose monetary policies in the second half of the year will benefit the corn market, analysts said.