July 6, 2011

 

China's state corn reserves low; imports hastened
 

 

China continued its weekly state corn sales on Tuesday (Jul 5) with offered volume sharply down from previous auctions, indicating dwindling state reserves.

 

China has increased imports from the US to replenish state reserves. Traders said China would continue buying corn following a steep price fall on the Chicago Board of Trade last week. Beijing has bought more than two million tonnes of corn since March.

 

The first two US corn cargoes were stored at state silos in the provinces of Guangdong and Jiangsu, traders and local media reported.

 

Tuesday's auction brings total state sales this year to 3.25 million tonnes. To cover a deficit and cool prices, the government sold a total of 27.44 million tonnes in 2010, 22.65 million tonnes in 2009 and 1.62 million tonnes in 2008, according to sources.

 

The government stockpiled 40.6 million tonnes of corn for temporary reserves in 2008 and 2009, which was in addition to an unknown quantity of strategic reserves. Stockpiling from the domestic market since late 2010 totalled 10-15 million tonnes, traders said.

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