China will start selling old corn stocks from state reserves this week, pressuring prices in the world's second-biggest consumer of the grain and offering some respite to livestock farmers from rising costs, said traders and analysts according to a report at Reuters.
The first sales of 2018 will take place on April 12 and 13, the National Grain Trade Center said in a notice last week, offering almost 7 million tonnes largely from the 2014 crop. The floor price for most of the corn is set at 1,350 yuan ($214.40) per tonne, slightly higher than last year, but significantly lower than current physical prices, said the analysts and traders.
Beijing is trying to get rid of huge stocks of aging corn that were amassed during a multi-year state stockpiling program. Last year it sold around 50 million tonnes, but it still has an estimated 179 million tonnes in warehouses.
This year it brought the sales forward by a month in a bid to help tame high corn prices, said Fan Jingya, grains analyst at Cofco Futures.
Corn has dropped nearly 1% this year, checked by rumors of the state release, after gaining nearly 14% on the Dalian Commodities Exchange the past two years. The corn futures moved little on confirmation of the sales.
Read the full report here.
