December 10, 2010

 

China releases more grain reserve onto market

China state grain reserve put 8.6 million tonnes of grain on the market from November 29 to December 3 to ensure market supply and stabilise prices, said the country's top economic planner Thursday (Nov 9).

 

The figure was up by 136,000 tonnes from the amount the previous week, with market prices seeing small declines and trade shrinking visibly, said the National Development and Reform Commission (NDRC).

 

The reserve included 1.8 million tonnes of corn, 4.5 million tonnes of wheat, 2.1 million tonnes of rice and 296,000 tonnes of soy, the NDRC said.

 

Previous figures showed a total of 25.5 million tonnes of stockpiled grain and cooking oil had been released on to the market since the end of October.

 

The NDRC said the reserve grain put on the market had begun to be effective in ensuring supplies and stabilising prices.

 

Corn coming into the market last week was traded at RMB1,843 (US$277) a tonne, down RMB9 (US$1.35) from the previous week, while wheat prices rose RMB1 (US$0.15) to trade at RMB1,900 (US$285)/tonne.

 

Meanwhile, the contraction in trade volume last week indicated an ample supply of grain on the market, it said.

 

Corn trade fell by 85,000 tonnes to 340,000 tonnes from the previous week, while that of wheat dropped by 448,000 tonnes to 627,000 tonnes.

 

Due to high import volumes, no soy was sold on the market, said the NDRC.

 

With the consumer price index, the main gauge of inflation, at a 25-month high of 4.4% in October, the government has been striving to ease commodity price increases and withdraw liquidity.

 

The government has also been trying to boost agricultural production, increase supplies of farm produce and energy and crack down on speculation. It has pledged to enforce price controls when it considers them necessary.

 

The People's Bank of China, the central bank, raised benchmark interest rates and hiked the reserve requirement ratio for banks twice in a month.