According to a report from China corn market net on Dec. 26, traders say Chinese officials have decided to postpone their issuance of new corn export quotas, cut back on the amount of quotas, and may not give any policy support [e.g. VAT rebate] for exports in order to "control prices and ensure domestic supplies."
The article says that China's decline in corn exports will allow American gain traders to maintain their Asian market share. Chinese corn prices have already bounced back from their two-year low due to the Chinese government's support of prices through increased reserve procurement.
China mainly exports corn to South Korea and Japan. According to customs statistics, this year's exports through November totaled 235,379 mt, down 95%.
This week the government required local grain bureaus to procure an additional 20 mmt of corn from farmers, bringing the total to 30 mmt.
Here is the planned procurement in the latest round which is to be completed by the end of April:
Inner Mongolia 3.3 mmt
Liaoning Province 3.5 mmt
Jilin Province 8.7 mmt
Heilongjiang 4.5 mmt
Total: 20 mmt
Relevant departments are to make their grain procurement plans in accordance with market conditions.
According to the notice from the government, all of the funds allocated for grain procurement and drying should be used; they should not be embezzled
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