(Adds analyst comment in the third paragraph.)
Dec. 9 (Bloomberg) -- China, the second-largest corn producer, has started purchasing the grain from farmers for state reserves, said two trading executives and a government official familiar with the matter.
The government will buy local corn at 1,960 yuan ($308) a metric ton in Heilongjiang province, 1,980 yuan a ton in Jilin and 2,000 yuan a ton in Liaoning, said the two executives, who declined to be identified as they are not authorized to speak to the media. There were no details on how much the government may buy or when the purchasing may end, the executives said.
Two calls to China Grain Reserves Corp., which is responsible for stockpiling grains and oilseeds on behalf of the government, wasn’t answered.
China’s imports of corn and wheat may rise as state reserves boost stockpiles and expanding livestock production spurs use of feed grain, state-owned researcher the China National Grain & Oils Information Center said Nov. 15. China bought corn from the U.S. this year to replenish its inventories after selling the grain to curb local prices.
“The government purchasing will help stem the recent decline in corn prices,” Tian Feng, analyst at BOC International (China) Ltd., said by phone from Shanghai today. “The futures market responded bullishly.”
Corn for September delivery, the most-actively traded contract, gained 1.3 percent to 2,249 yuan a ton on the Dalian Commodity Exchange.
China may import 4 million tons of corn in the year that started Oct. 1, an increase of 3.02 million tons from a year ago, after state reserves boost purchases, the national grain center said in November.
--Feiwen Rong. Editors: Richard Dobson, Ovais Subhani
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