Destocking of Temporary Corn Reserves Would be Started from May, but the Sales Possibly Would be Sluggish

By CnAgri2017-04-05 09:33:31 Print

Recently, the National Development and Reform Commission (NDRC) announced that cornstocks would be arranged to sell from May 2017 to new-season corn availability on the market, along with determining the selling price and mastering selling opportunities and pace on the basis of no pressuring market. However, at the beginning of auction, the transactions would be sluggish. The main reasons are as the followings:

(1) Corn and substitutes would be in an abundant supply: in early May, the farmers in the northeast and north China would have limited stocks, but, these corn would have turned into commercial stocks, and corn would be in abundant supply in the link of distribution; besides, owing to a rebound in import volume of sorghum, barley, and their substitutes in the first two months of 2017, some shipments would arrive at the ports in succession;

(2) Grain-consuming companies have relatively high stocks: owing to the subsidies for further processing and feed companies in the northeast, they have relatively high stocks. Predicted most companies have the stocks that could be processed until the end of June, so they still would have less willingness to purchase at early May;

(3) The quality of temporary corn reserves is poor: corn produced in 2013 and 2014 has the priority to be sold. After 2/3-year storage, the quality has decreased obviously and the scope of use would be limited.