China Considers More Subsidies for Corn Processors, State Sales Low
As a move to help drive up consumption and support its corn processing industry which has been suffering losses, China is considering doubling the subsidies paid to its corn processors in the main producing region of the northeast of the country.
Corn consumption by the industry declined 5.2% in 2013/14 to 47.6 million tons – the biggest decline in five years, after the government significantly increased the domestic price paid to its rural growers as part of a stockpiling scheme.
Under the proposed plan, corn processors with a capacity that exceeds 100,000 tons per year would be offered a subsidy of 200 yuan, or $32 per ton – double the subsidy offered last year.
Because of the record stockpiles held in inventory, the Chinese government began its weekly sales on April 9, a month earlier than last year, and earlier this year raised an export tax rebate to try to make the country’s corn exports more competitive, and possibly bring utilization by processors over 50 million tons for the year.
Despite these measures, sales have been weak, with China selling 2,808 tons last week – only 0.95% of the 295,481 tons offered, and down from the 15,958 tons sold the week before out of the 311,449 tons offered.