Corn futures traded in on the Dalian exchange in China have risen about 20% since Covid-19 began spreading in China in February. Over the same period, prices for US corn futures have fallen 12%.
The rise in corn and other food prices, including pork, have pushed food inflation in China into double-digits. The result has been China buying more grain abroad, including recent big US corn purchases.
The London Financial Times reports domestic corn prices have surged in part due to a 90% plunge in government stockpiles in recent years as China has tried to reduce the role of the state in the buying and selling of the corn crop.
Some analysts believe that at the current rate China’s government corn reserves may run out as soon as the end of this month.
This has led to rampant speculation by traders who are hoarding the crop, leading the Ministry of Agriculture and Rural Affairs to warn it was “not appropriate” for traders to hoard the commodity, according to the FT. State media has also urged authorities to crack down “severely” on speculation, said the report.