Jilin Widened the Scope of Subsidies for Feed Companies, Which Would Push up Corn Prices

By CnAgri2017-03-29 09:31:52 Print

On March 21st, Jilin unveiled the policy of financial subsidy for feed processing companies with annual designed capacity of more 20,000 MT. The subsidies of RMB 120/MT would be allocated to feed companies who annual output is upward of 50,000 MT and annual designed capacity exceeds 20,000 MT, and meanwhile purchase and process corn produced in 2016 within the specified time.

2015 compound feed output in Jilin was 3.21 million MT (conversion into compound feed capacity at 6-7 million MT. The companies with annual output at more 50,000 MT listed in the scope of subsidy account for 30%. After this expansion of scope of subsidies, more 70% capacity can be covered. Considering that the time limit of enjoying subsidies possibly: purchase before April 30th and processing before June 30th, the actual scale of corn purchase and processing won’t exceed 1 million MT.

However, there is little local corn in Jilin, and new-crop corn most is in the hands of dealers. By March 20th, corn purchase in Jilin had reached 26.48 million MT, higher than 95% of local corn output. It means that feed mills will intensively purchase corn from the traders, and at that time, the traders will raise corn selling prices.