Country trying to offset high prices, stabilize market
China is releasing corn and rice from state reserves to help offset inflation and stop imports as a result of global price increases due to the ongoing U.S. drought, according to reports.
Rationing is already in full force, and further measures may be needed, said Christopher Narayanan, head of agricultural commodities research at Societe Generale. While no numbers have been given, some traders are predicting around 2 million tons might be sold to help stabilize prices ahead of the harvest.
“It can help stabilize the market somewhat, but the volume is too small compared with the 10 million to 15 million tons of monthly consumption nationwide,” said Xu Wenjie, an analyst with Zheshang Futures Co. China has become a significant corn importer in recent years, as domestic meat consumption increases.