China will continue to offer corn and soyabeans from state reserves at auctions next week, and will at the same time buy for state reserves from the domestic market. Beijing will offer a total of 1.8 million tonnes of corn and 300,000 tonnes of soya on Tuesday. The auctions, restricted only to some big companies, aim to boost supplies and cool food prices ahead of the Lunar New Year in early February.
Some major corn processors have been ordered to halt purchasing from the market so as to let the government make purchases first to refill its dewinding stocks. Traders said Sinograin, which manages the central government reserves, plans to buy an initial volume of between 8 to 10 million tonnes. But prices it offered, at about 1,800 yuan per tonne to farmers, was lower than market prices to avoid driving up inflation.
The government has sold 26.26 million tonnes of corn from state reserves since April 2010. The public auction for soyabeans has so far attracted no bidders. The government this week agreed to sell 350,000 tonnes of soya directly to crushers and 450,000 tonnes of rapeseed oil at a much lower price to compensate crushers hit by the government's cap on retail edible oil prices.
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