China is to see a continuation of the rise in corn prices which has taken them to record levels in some areas, and reopened the country to significant imports for the first time in 15 years, the country's crop think tank has said.

Chinese corn prices had continued to appreciate, reaching 2,200 remninbi a tonne at some delivery points, including Chengdu and Ganzhou in the centre of the country, the China National Grain and Oils Information Centre (CNGOIC) said.

And they will continue to increase in June as concerns for shortages keep a squeeze on domestic supplies, the centre added in a report.

Harvest questions

The briefing comes amid revived speculation that, thanks to drought, China's 2009 corn crop fell significantly below official figure of more than 160m tonnes given last year, and the US estimate of 155m tonnes.

And concerns are growing for another below-par harvest in 2010, after cold weather pushed back sowings, with JC Intelligence pegging the crop at 151m tonnes, well below US Department of Agriculture forecasts of 166m tones.

While Beijing has signalled that it has more than enough inventory to cover any shortfall, the "60m-tonne estimate for reserve stocks that has been floating around… could quickly get whittled down if some of the private estimates for production and usage end up being realised", Benson Quinn Commodites, the US broker, said.

Chicago prices to rise? 

The CNGOIC report also acknowledged talk that Beijing was to approve further corn imports – rumours of which supported Chicago prices this week even as other markets tripped over concerns about Korean hostilities and the eurozone.

JC Intelligence has forecast that the Chinese government will issue import licences for some 5m-6m tonnes of corn.

The country has already bought 600,000 tonnes of US corn over the last six weeks.

Speculation over further purchases was likely further to "protect corn prices on the downside", Commerzbank said on Thursday.

"Since [China's] domestic corn prices remain high, further corn imports are on the cards," the bank said.

"Speculative investors may therefore increasingly bet on rising prices, so the risk of prices breaking out on the upside overweighs."