BEIJINGf - China's government should release its massive state corn reserves as soon as possible as the stockpile scheme has dried up domestic supplies and pushed up prices, a delegate of parliament proposed on Thursday.
Tong Yi, who is also the head of state-owned food processor COFCO in the northeast province of Jilin, made the proposal to the National People's Congress (NPC), or parliament, during its ongoing annual meeting that started Saturday.
State sales by China, the world's second-largest corn consumer, could pressure global prices <0#C:> and corn substitutes including sorghum and barley. Corn substitutes have been used to replace expensive domestic corn over the past year. Domestic corn has risen as the stockpiling scheme has reduced freely available supply.
Beijing has stockpiled 88 million metric tons of corn by the end of February under its 2015/16 stockpiling scheme. The programme has taken about 90 percent of the harvest from China's main corn growing region in the northeast and local processors are facing an "embarrassing situation" with less corn available to them, according to Tong's proposal.
On the other hand, the government is sitting on massive stocks of about 250 million metric tons of corn at the end of February, as estimated by market analysts, it said. Tong's proposal was posted on the NPC website ( www.npc.gov.cn ).
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Beijing's current stockpile scheme lasts until end of April and it normally starts to sell the reserves after the scheme ends.
Industry participants expect Beijing to sell the grain at about 1,500 yuan ($230) per metric ton, which should be competitive with imports, unlike last year when high prices attracted few bidders.
China plans to unveil a new state corn price policy as early as this month to make domestic prices low enough to keep imports outside the country, a senior government official say Feb. 29.
