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Interview: With Chinese wheat and corn production at record levels, how can the continued problem of increasing stockpiles be alleviated?

Hear from COFCO Future’s Managing Director, Wang Ling.


With Chinese wheat and corn production at record levels, how can the continued problem of increasing stockpiles be alleviated?  Are subsidy reforms needed?


Currently, China’s stock of oils, corn and grains are all at record high levels, of which the corn stock is above 240 million tons and rapeseed oil stock is 6.21 million tons. The state shows strong resolution to reduce stock.

It has been reducing subsidy to alleviate the problem of increasing stockpiles, aiming to reduce farmers’ incentive and gradually reduce production and stock. For instance, rumour has it that subsidy for corn temporary reserve is decreased to 1400 Yuan/ton which is much lower than this year’s 2000 Yuan/ton.

Meanwhile, the cost of State Reserve purchase for rapeseed oil reached above 10700 Yuan/ton while the transaction price for 2011 rapeseed oil on the auction in 2015 was at 5300 Yuan/ton. Rumour also has it that the government is working on selling the reserve aged corn to the processors and will announce how to release it.

We believe in the following few months more policies will come into place after the State Reserve including State Reserve release and subsidy policies as well as encouraging domestic feed millers to adopt domestic products as the raw material.




This content is provided by Global Grain Events for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.

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