Chinese corn area is down 2.0m hectares this year, the country’s agriculture minister said, as he restated his plan to cut sowings 9% by 2020.
Speaking to state media, Chinese agricultural minister Han Changfu saw sowings for the 2016-17 crop year down 2.0m hectares, rather than the 1.3m hectare reduction forecast earlier this year.
Based on previous statements by the ministry, this would imply a 2016-17 acreage of some 24.6m hectares.
The US Department of Agriculture, sees Chinese corn acres down 2.12m hectares, at 36.00m hectares, the first drop in 14 years.
Prices fall to 6-year low
The speed of the drop in sowings suggests that the Chinese policy of discouraging sowings by allowing prices to fall is bearing fruit.
Indeed, Mr Han restated his ambition to cut the country’s corn sowings by 3.3m hectares, to 33.3m hectares, by 2020.
On Friday front-month corn futures in the China fell to a 6-year low of 1,638 yuan a tonne.
But Mr Han told the state-owned radio programme that further reducing sowings could be difficult, if farmers prove unwilling to change their sowing patterns.
Key to reducing corn production is the end of a long term price support system.
The Chinese government is believed to have some 240m tonnes of corn in its warehouses, due to a policy of purchasing corn in order to provide a price floor.
Now the scheme is being wound up, as the government attempts to sell-off its heavy reserves.
But take up at the Chinese corn auctions has been very slow, with just 12m tonnes, out of 39m tonnes offered, sold so far.
Little demand for ancient corn
Demand for all corn, but particularly older, and improperly stored corn, is tailing off fast.
At the most recent auction, held on July 29, just 11% was sold, out of 4.3m tonnes of corn on offer, all from the 2013 harvest.
At an auction of aging corn, held on July 26, just 4,019 tonnes was sold, out of 1.9m tonnes offered.
China’s support for corn saw the area under cultivation hit 37 million hectares last year, up from 23 million hectares in 2001, according to U.S. Department of Agriculture data.
The less-than-enthusiastic response is seen as evidence of the very low quality of corn available in these auctions.
Last month the Financial Times reported that only industrial processors were buying corn in auctions, with reports that supplies were unfit for human consumption, due to improper purchases by corrupt reserve officials.
(Source – http://www.agrimoney.com/news/chinese-corn-area-down-by-2m-hectares–9802.html)