News
18.09.2009
COFCO sees drought cutting China's corn harvest
A drought in China's main corn-growing areas may cut this year's harvest by 12 million tonnes, or 7.5 percent, from 160 million tonnes in 2008, a Chinese corn sector executive said on Thursday. "In the coming years, we don't see any need for imports. China is basically balanced in corn supply and demand," Yue Guojun, assistant president of China's largest grain trader and corn processor COFCO, told reporters on the sidelines of a conference.
Yue said the drought was serious but that the impact on the size of the harvest would be less than in the past because of a larger planting area this year. China has drought insurance in the form of huge state stockpiles of corn, estimated at about 36 million tonnes, bought by the government's buying agency Sinograin.
Yue said COFCO planned to ask the government to let corn processors join Sinograin in the stockpiling programme, a measure that he said would halve the state's stockpiling costs. The government buys up crops to stabilise prices and support farm incomes. It has not yet said how much it will offer farmers for the new crop.
The government needs to consider farmers' costs when deciding on the price, Yue said, adding that offering the same price as last year would reduce farmers' profits. He said corn processors were operating at higher rates than in early 2009 due to good sales of corn starch and alcohol. There was no further expansion in the corn processing industry this year, so he expected stable corn consumption by processors next year.
Reuters
Reuters
