China to step up control on grain imports as stocks rise


China will strengthen controls over grain imports and illegal activities, such as smuggling, in an attempt to cut oversupply, as large volumes of stocks are creating storage problems for the 2014 new harvest, recently concluded and estimated at record highs. Under the current policy, the Government procures grains from farmers at a fixed support price, that has made grain imports more attractive for end-users like feed mills. International maize prices have decreased in recent months to multi-year lows, driven by the positive outlook for the 2014/15 global supplies, mainly due to an expected record output in the United States, the world’s largest maize producer. The benchmark US maize (No.2, Yellow) averaged USD 164 per tonne in October, while China’s support price for maize has remained unchanged at around 2,220-2,260 yuan (US$362.9-US$369.5) per tonne. The wide price gap between domestic and export prices have resulted in surging imports.