December 22, 2010

Low sales at China's weekly corn auction

Trades at a weekly state corn sale on Tuesday (Dec 21) remained low, with feed mills in the south the biggest buyers because of cheap prices, while companies boosted purchases of this year's corn from farmers.

The central government sold 190,200 tonnes of nearly 1.8 million tonnes offered at the auction.

However, the volume sold was higher than that from the previous week's auction, when the government sold only 7.9% of a similar volume of corn.

While the government has held weekly sales of state reserves to big feed mills as part of efforts to cap food price rises, the northeast province of Liaoning, a major corn-growing area, issued a tender to buy 16,000 tonnes for local government reserves, according to official announcements.

The central government has not started stockpiling this year's harvest as it has done in previous years for fear of driving up prices already near record levels.

The authorities were also investigating maximum stocks held by individual companies in a crackdown on hoarding as feed mills and processors have increased purchases of this year's corn.

Companies had bought a total of 19 million tonnes in 10 major growing areas by early December, 11 million tonnes more than a year earlier, according to figures issued by the State Grain Administration.