World Bulletin/News Desk
China will release corn and rice from state reserves to help tame inflation and reduce imports as the worst U.S. drought in half a century pushes corn prices to global records, creating fears of a world food crisis.
Friday's announcement was the first release since September last year, when China said it would sell 3.7 million tonnes of state corn to keep inflation under control.
The release may prompt Chinese importers to cancel shipments in the near term and take some pressure off international corn prices, which set a new all-time high on Friday as the U.S. government slashed its estimate of the size of the crop in the world's top grain exporter.
"Bottom line - rationing is in full force, and given the continually declining state of the U.S. corn crop, more will be needed," said Christopher Narayanan, head of agricultural commodities research at Societe Generale.
China's State Administration of Grain did not specify the volume of corn or rice to be released from reserves. The Grain Reserves Corp will be responsible for selling the crops, but no details were given on the timing.
Some traders estimated the government might sell around 2 million tonnes to help stabilize prices ahead of the harvest, when supply is usually tight.
Beijing will probably need to replenish reserves towards the end of the year, and therefore the release will have only a limited impact on prices.
"It can help stabilize the market somewhat, but the volume is too small compared with the 10 million to 15 million tonnes of monthly consumption nationwide," said Xu Wenjie, an analyst with Zheshang Futures Co.
Domestic corn futures on the Dalian Commodity Exchange have risen 12 percent this year to around 2,400 yuan ($380) on Friday, just off the year-high of 2,429 yuan touched on July 16.
China, once self-sufficient in corn, has become a major importer in recent years as incomes rise for the growing population and people eat more meat.
Increasing livestock herds have made China the world's second-largest consumer of corn and it has been buying aggressively during price declines.
A report by the U.S. Department of Agriculture (USDA) on Friday raised its forecast for China's corn crop this year by 2.5 percent to 200 million tonnes.
"With USDA raising its Chinese corn production estimate ... it certainly makes sense to release some corn from reserves," Narayanan said, noting that the USDA also cut its estimate of Chinese corn imports by 3 million tonnes to 2 million.
Vessels were delivered to port of Alexandria on June 17
The economic cost of violence according to the 2015 Global Peace Index has reached a staggering $14.3 trillion with Syria the least peaceful country.
The leading opposition lawmaker has said that Turkish President Erdogan is open to all possiblities for a coalition.
Qatar has filed a lawsuit against the leader of the National Front in France for his comments regarding "terror" activities.
Saudi Arabia will put in place an electronic bracelet system for all pilgrims visiting the country to perform their Hajj duties.
After U.S. Federal Reserve Chair Janet Yellen indicated that the central bank was poised to raise interest rates, European stock markets fall.
Italian company Enel will invest 18 billion euro for renewable energy sources in Africa.
Azerbaijani president said in a statement that Southern Gas Corridor project will supply neighboring and European countries for a 100 years
Oil prices rose above $60 due to Iran's call for oil production cut
Economic growth in the Euro-Zone is not at desired levels.
Director and Global Head of Islamic Finance at Standard & Poor's says that growing market for sukuk and new players mark 'significant interest' in Islamic finance.
The Ministry of Finance said that Denmark has written to China to "announce its intention to apply to be a founding member" of the AIIB.
Experts state that the crisis poses risks to the region, which is significant for oil production and exports in the world.
Federal Reserve removes word 'patient;' interest rate increase expected within months. Yellen says timing of rate rise 'not decided,' but will come anytime after April; holds current rates at 0 to 0.25 pct.
Many emerging-market currencies have fallen against the dollar in recent weeks
Anticipated Federal Reserve interest rate hikes making dollar strong against most emerging market currencies, Deputy Prime Minister Ali Babacan says.