ADVERTISEMENT

China Blames Speculation and Hoarding for Corn Price Surge

China Blames Speculation and Hoarding for Corn Price Surge

Fund speculation and irrational hoarding are to blame for a spike in China’s corn prices, agriculture minister Han Changfu told state media on Wednesday.

A recovery in hog breeding capacity, and an expansion of the corn processing industry have also contributed to prices, which this week climbed to the highest in five years before paring gains, said Han.

Prices should not climb further, owing to ample commercial stocks and the upcoming harvest, Han said. China may still see a bumper harvest despite crops being flattened by rains that were triggered by typhoons in the northeast, he added in the interview, which was posted on the ministry’s website.

His comments came as China’s customs data indicated the country last month imported the most corn in more than four years, driven by the spike in domestic corn prices on expectations of a supply deficit. China purchased more than 1 million tons of corn in August, the most since April 2016, official customs data showed.

China Blames Speculation and Hoarding for Corn Price Surge

Han said China will increase corn imports only where necessary. Import volumes of soybeans, used in animal feed and cooking oil, will continue to be large, as domestic output is unable to meet demand.

China has increased cereals imports this year but imports are equivalent to only about 2% of the country’s output, as it aims for self-sufficiency and relies on its own production to meet domestic demand, said Han.

China imports only hard and soft wheat varieties when the country is unable to produce enough, he said. China’s wheat imports are forecast to jump to the highest in more than two decades for 2020-2021 in part to meet pledges made to the U.S. under the countries’ phase one trade deal.

©2020 Bloomberg L.P.

With assistance from Bloomberg