China’s state grains stockpiler Sinograin said it would sell 37,126 tonnes of imported corn on June 18, as it looks to replenish tightening supplies and cool high domestic prices for the crop.

The corn to be auctioned – in the first such sale in China for several years – is from Ukraine, according to a notice published on Sinograin’s website.

The auction will begin at 10:00 a.m. (0200 GMT), said the notice, which added that companies wishing to bid need to be members of Sinograin’s storage network and make a security deposit of 270 yuan ($42) per tonne.

The volume being sold is only a fraction of the record 11.3 million tonnes of corn that China, the world’s second-largest corn consumer, imported in 2020. Traders had expected a relatively small auction as the government looks to send out a message to the industry about high prices.

“It is mainly a warning to the market, saying ‘don’t speculate on agriculture products’,” one grains trader said before the notice came out.

Beijing has repeatedly said it will strengthen control over supply of major commodities from iron ore to corn to cool surging prices.

China’s domestic corn futures DCCcv1 hit a record high of 2,887 yuan a tonne last month. Prices fell 0.3% to 2,684 yuan in night trading on Tuesday.

“The government has the tools (to cool prices,) but I am not sure how long it will keep at these operations,” said the trader, declining to be named as he was not authorised to speak to media.

The price rally came after China sold off its once massive temporary reserves of corn in 2020, having tried for years to reduce huge inventories of ageing grain.

It is expected to import 22 million tonnes of corn in the 2020/21 marketing year, the agriculture ministry said in April, more than doubling its previous forecast.
Source: Reuters (Reporting by Hallie Gu and Tom Daly; Editing by Alex Richardson and David Evans)