Monday, February 13, 2017

Double Down on Corn-Buying Efforts in Jilin Province

Worried about the slow pace of corn purchases, officials in a northeastern China province have ordered local officials and companies to step up corn-buying efforts.

A February 3, 2017 circular issued by the Jilin Provincial government raised concerns that last fall's corn crop is being purchased at a much slower pace than usual. The 15.7 million metric tons of corn purchased as of last month's spring festival was much less than in previous years. Despite great efforts and special measures to ensure that farmers are able to buy this year's corn harvest, the document says there have been declines in price recently, buyers became cautious, and farmers are anxious to sell their corn. There has been a steady increase in unspecified new contradictions, new situations, and pressure on grain marketing.

Each local government and department must pay high attention, clearly recognize the new situation grasp the extreme importance, complexity, and arduousness of grain purchase and sale, and recognize the utmost importance of work on purchase and sale of grain, the document said. The circular calls for adopting "unconventional measures."

The document orders local officials and companies to double down on efforts to buy corn by encouraging diverse players to enter the market to buy grain. Officials must fulfill the obligations demanded by the provincial governor food security responsibility system. They should ensure implementation of subsidies for industrial processors and feed mills to buy corn. They should coordinate transportation of grain by rail and enforce the waivers of highway and bridge tolls for grain. Companies should process more, buy more, and build more storage facilities. COFCO's trading company, China aviation grain reserve company, and provincial grain companies are called upon to exercise their social responsibility to buy grain. The provincial branch of Sinograin is instructed to buy more grain when prices are falling and other companies exit the market, and to make large one-time purchases. Officials are instructed to form partnerships with purchasers and make credit available. Officials should arrange for technicians to advise farmers on preventing quality problems, but they should also encourage companies to loosen up quality requirements to allow farmers to sell corn with excessive levels of mold.

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