China, the world’s second-largest corn consumer, suspended its weekly state corn sales to encourage companies to buy grain from the crop currently being harvested, according to the National Grain Trade Center.
Auctions were suspended starting from this week and will resume sometime after May when sales of new-crop corn are set to end, the online trading platform for state stockpiles said in a statement on Thursday. The government will then set bidding prices based on market demand and will try not to suppress market prices, it said.
China this year ended its state stockpiling program and moved to more a market-based system after its acquisition of grain at above-market prices led to a glut of corn. The government has more than 200 million metric tons of corn in its reserves after selling about 42 million tons and holds more than the country’s annual consumption, the China National Grain and Oils Information Center said on its official WeChat account on Thursday.
This year’s sales include 21.8 million tons from weekly auctions. Another 20 million tons were sold by China Grain Reserves Corp., which manages state grain reserves, directly to the market as part of its annual rotation plan, the center said. Corn futures traded in Dalian climbed to a two-month high on Thursday on expectations Sinograin will purchase corn to refill stockpiles.