AgroPages-2016/17 Chinese corn purchasing price may suffer a further 10% drop-Agricultural news

According to industry information, Chinese government is planning to lower the domestic corn purchasing price for the second time, aiming to boost the depressed processing industry and to eliminate the huge inventory at hand.

China’s corn has the highest price in the world, which makes the processing industry difficult to be sustainable. The government plans to lower the corn purchasing price by another 10% in 2016/17, which will come down to Yuan 1,800 per ton, being approximately US$ 282 per ton. Some time ago, government already announced 10% reduction of the corn purchasing price in 2015/16.

China is the second largest corn-consuming country. Processing enterprises use corn to produce feeds, sweetener and ethanol. The lower corn purchasing price will affect the demand for feeds like sorghum, corn liquor dregs and barley. Due to the huge stockpile, domestic corn price is still far higher than that of import. China’s lowered corn purchasing price will restrain the demand of Chinese processing industry for imported corn, thus to squeeze the international corn price.