Grain anti-corruption investigations increase in New Year
Central Commission for Discipline Inspection (CCDI), China’s anticorruption watchdog, published another policy opinion on January 30th about the need to increase its fight against corruption in the grain industry.
The CCDI said that would step up its investigations and that it was necessary to increase punishments for grain-related corruption. It also said the country should focus on building smarter grain depots with better oversight and monitoring capabilities.
The CCDI also published a list of 10 recent major cases as examples. Some cases included misappropriating 110 million yuan in state funds, illegally selling tens of thousands of tons of state grain for personal profit and many accepting bribes over 10 million yuan.
While the market guesses at the size of China’s grain stockpiles, there is probably also some uncertainty within the government about the accuracy of their own confidential numbers due to the amount of corruption in state-owned grain enterprises. Food security has become a higher policy priority for China, and therefore cracking down on corruption is seen as key to ensuring the country’s self-sufficiency.
Edible oil futures remain under pressure amid weak post-holiday demand
Futures for edible vegetable oils in China continued to be under pressure on Wednesday as demand is expected to have fallen since the end of the Spring Festival holiday as people return to work.
Contracts for the three most-consumed vegetable oils traded slightly lower by market close.
Futures for feed ingredients retreated as well after reports of the Chinese stockpiler’s plan to release 15-18 million tons of rice reserves to cool grain prices in the country.
These reserves will be sold via auctions starting in March. Major feed producers will be participating in these auctions to buy old-crop rice which they could use to displace corn and other grains in their feed formula.
Hence, corn and soybean meal futures on Dalian Commodity Exchange (DCE) softened, while rapeseed meal futures on the Zhengzhou exchange traded sideways.
The No.2 soybean futures on DCE fell 1-2% across the curve as Chinese crushers were heard snapping up 10 cargoes from Brazil and US Gulf in the first half of this week to cover their demand.