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China’s Policy Shift likely to Benefit Processors

Hoosier Ag Today by: Hoosier Ag Today

While China’s plan to let the market set corn prices beginning with the 2016-2017 marketing year will likely slow imports, the policy change should aid the nation’s struggling corn processors. Many food processors in China have been sitting idle for years, as they have been operating under losses. More than half of China’s corn starch industry capacity is sitting idle, as well. The policy change should also lower feed costs for China’s pig industry and lift ethanol producers’ profits. China has accumulated an estimated 250 million metric tons of corn in state reserves, and some analysts say it may take years for the nation to draw down the supply. However, as the U.S. Grains Council previously indicated, the stored corn quality could be poor enough to force the nation to continue importing feed grains.

Source: NAFB News Service

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