December 24, 2008

China to buy 4.5 million tonnes of corn by early next year

The Chinese government will buy 4.5 million tonnes of corn for reserves by April 2009, in an effort to stabilise domestic corn prices, according to Xinhua news agency.

The move is part of the government's policy to stockpile 7.1 million tonnes of corn and 2.03 million tonnes of soy in Heilongjiang, said the report which cited the grain reserve authorities in Heilongjiang province as its source.

The government may decide to buy more grain for reserves, depending on market conditions and the needs of the farming industry, the report said.

The government will buy 20 million tonnes of corn from areas across China to defend slumping domestic prices, said Liu Zhaofu, general manager of Heilongjiang-based soy consultancy Longma Consultation.

He said then that the government was considering a 4.3 million-tonne purchase from Heilongjiang and 8.7 million tonnes from Jilin province. The two provinces are the country's largest corn producing areas.