Grain traders told Reuters that China’s policy change to end corn stockpiling brings the risk of lesser demand from China.
The Chinese government confirmed this week the nation will end its corn stockpiling program at a time of high global supplies.
Importers in China are likely to reduce purchases of farm products for livestock feed, including sorghum and dried distillers grains, or DDG’s.
The policy shift aims to bring China’s domestic corn prices more in line with foreign supplies.
China has become a significant importer of corn from the U.S. and other countries in recent years as the county has accumulated an estimated 250 million metric tons of corn in reserves, more than the country can consume in a single year.
Some economists predict it will take China years to eat through its massive stockpiles.
However, the country may need to keep importing feed grains if the quality of the reserves is poor or domestic prices remain too high, according to the U.S. Grains Council.
