China to stop corn, soy subsidy if prices exceed thresholds

China will stop payments to corn and soy processors currently eligible for government subsidies if prices of the commodities rise above certain levels, according to a joint statement issued by several ministries, led by the Ministry of Finance.

When soy prices in the northeastern major producing areas rise to RMB3,940 a metric tonne, which is RMB200 higher than the minimum purchase price set by the government, China will stop providing subsidies to crushers, the ministries said.

And when corn prices in the same producing areas rise to RMB1,600/tonne, higher than minimum purchase prices of RMB1,480-RMB1,520/tonne, the government will stop providing subsidies, said the statement.

The government started buying soy and corn in the northeast at the minimum purchase prices as of December 1. It and will provide subsidies of RMB160/tonne for soy crushers that buy the crop at the minimum purchase price and RMB70/tonne for corn purchases by certain companies, if the set purchase prices are higher than those prevailing in the market.

US$1 = RMB6.8276 (Dec 3)