An unspecified amount of corn from the national reserve will be
released in the market next Tuesday to curb rising prices.
The quantity and auction venues will be announced today or
tomorrow, an official from the State Grain Administration told
China Daily yesterday.
State Grain Administration chief Nie Zhenbang said more corn
will be auctioned if the price surges continue.
Corn prices have been on the rise mainly because of expanded
ethanol demand as global crude oil prices keep surging and the corn
yield decreases both at home and abroad.
In major domestic corn markets, the average price rose 3 percent
last week from the week before. Globally, prices increased 18
percent last month year on year, after surging 50 percent in
2006.
The National Development and Reform Commission yesterday
reiterated that the government should take stricter measures to
stop corn being used to produce ethanol for bio-fuel, and urged
corn exports to be tightly controlled. "If all these measures are
fully implemented, the demand and supply will be balanced," said a
spokesman for the commission.
About 2 percent of the country's corn output, or 3-4 million
tons, is used each year to make ethanol; and much of the rest is
used for animal feed.
But rising prices for feed coupled with animal diseases have led
to pork price hikes this year.
The International Food Policy Research Institute said corn
prices will continue to rise.
"Rising oil prices are the major driving force behind the
long-term trend," the institute said this week.
According to the institute, ethanol production is profitable
even if oil prices hover around the $60-$70 a barrel mark. They are
currently around $90.
(China Daily December 6, 2007)
