Sinograin stores 1.2 million tonnes corn

 

 

From the 2011 crop since December, Sinograin has stockpiled only 1.2 million tonnes of corn, an industry website quoted a company official as saying on Thursday (Mar 15).

 

The volume was just over a tenth of the 11 million tonnes stockpiled as "temporary reserves" from the 2010 harvest, Song Zhiyuan, an official with the purchase department of Sinograin, told a conference, the web site, www.ex-starch.com, reported.

 

The low volume, in line with estimates by traders and analysts, could prompt the Chinese government to import corn this year to replenish its reserves as it did last year, when it booked nearly four million tonnes.

 

Song said Sinograin had no plan to release its imported corn reserves to the market soon, although domestic corn futures hit their highest level on Thursday.

 

The most-active September 2012 contract was traded at RMB2,471 (US$390) per tonne, up 1.1% from Wednesday.

 

"Feed mill demand would rise slightly while demand from corn processors stays flat and we expect corn supply this year would be in a minor surplus," Song said in brief remarks posted on the web site.

 

Song expected farmers were still holding about 15 to 18 million tonnes of corn in the country's northeastern corn belt and 21 million tonnes in the northern areas. Beijing's corn stockpiling plan will end on April 30.

 

Domestic physical prices for good quality corn offered at major ports in the north could hit RMB2,500 (US$390) per tonne due to tight supply after lots of corn got mouldy, said Song.

 

Excessive rains in northern China last year during harvest damaged the quality of the grain, of which China is the world's second largest consumer.

 

China could step up imports because farmers were selling their harvest at a slow pace while US corn prices fell below prices in China, Shang Qiangmin, director of the China National Grain and Oils Information Center (CNGOIC), told the conference.

 

Higher domestic prices have already led feed mills in the major consuming areas in the south to import corn.

 

The USDA on Tuesday reported a private sale of 240,000 tonnes of old-crop US corn to an unknown buyer, widely believed by traders to be China. The purchase followed the sale of 120,000 tonnes in February to China.