In the following season China is out to accumulate huge stocks of corn which will lead to reduction in its necessity of import, writes Agrimoney.com

The International Grains Council (IGC) estimates ending stocks of corn in the current season on a high level- 80.6 million tons. During 2014/2015 season, the stocks will continue grow due to record high harvests and the decelerated demand on domestic market. By the end of next season, reserves will reach 87.3 million tons, which will represent 49% of world reserves.

Despite the large reserves, the price of corn on the domestic market remains high due to government support measures. Current price of corn in Guangzhou province, the main consumer of this crop, is more than $400/ton; this is more than twice the price of corn on the Chicago Board of Trade (CBOT). Price of corn of Chinese origin exceeds the price of American corn, including all transportation and other costs, including VAT (13%) and the import duty (1%), by more than a third.

The excess supply of corn will reduce its import from 4.8 million tons in the current season down to 3.0 million tons in 2014/2015.