China Grains Reserve Corp. (Sinograin), which oversees the central government's reserves, bought one million tonnes of US corn in March, indicating that rising domestic demand pressures have prompted the nation to seek overseas supplies.
Cheng Bingzhou, the company's spokesman, confirmed the news to Reuters and added the company has no plan now to import more. Further imports have to balance farmers' interests while curbing domestic grain price rises, he said.
The company has started to load its first cargo of 330,000 tonnes of corn from a US port, which is expected to reach China in June or July.
After deducting tariffs, value-added tax and other port fees, the cost of the imported US corn would be about RMB 2,100-RMB 2,200 per tonne.
In southern China, domestically produced corn has reached an average price of RMB 2,350 per tonne, and the price may continue to gain as demand for fodder consumption increases.
Falling domestic reserves
Sinograin is the largest policy grain reserve company in China, and it has a mainly domestic focus. The shipment is the first time the company has imported US corn.
China implements strict quota controls over imports of grains including corn, wheat and rice. The National Development and Reform Commission, the country’s powerful economic planner, grants 60% of the quota to state-owned companies, with private enterprises sharing the rest.