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China to boost corn buying by 20 million tonnes

China’s government has boosted its plan to support farmers by buying an extra 20 million tonnes of corn, tripling its commitment, the State Administration of Grain said Dec. 24.

The increase will help “stabilize grain prices and protect farmers’ incomes,” it said on its website

The purchases, the third round of buying after this year’s record domestic grain harvest, would continue in four provinces in the northeast and will end by end April, the bureau said.

It will increase purchases in Jilin, the largest corn area, by 8.7 million tonnes and by 4.5 million tonnes in Heilongjiang.

Heilongjiang’s grain bureau said Beijing’s purchases in the province, which total 7.1 million tonnes of corn as well as earlier purchases of rice and soybeans, would “basically meet the farmers’ needs to sell their extra grains” and “effectively resolve the problem for farmers in selling their grains.”

The extra corn purchase stirred speculation that the government may also increase purchases of domestic soybeans on top of its existing commitment of three million tonnes, but government authorities did not mention any increase for soybeans.

The extra 20 million tonnes of corn brings the total to 30 million tonnes, almost one fifth of the harvest.

Although the government’s buying plan has triggered imports of soybeans, the same outcome is unlikely for corn because imports are restricted by quotas and the government has not issued any import quotas for 2009.

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