CHINA will strengthen control over grain imports and crack down on illegal activities like smuggling in a bid to cut oversupply, with record stockpiles creating storage problems for the new harvest, Vice Premier Wang Yang said Friday.

    China’s stockpiling policy, under which it buys from farmers at inflated prices, has made cheaper overseas supplies more attractive for end-users like feed mills, forcing the government to take action to try to curb surging imports.

    “We will strengthen import and export controls for grains while severely cracking down on irregularities like smuggling in order to stabilizes the domestic market,” the vice premier said at a national conference.

    China’s rejection of cheap U.S. corn cargoes on the grounds that it contained a genetically modified strain not permitted for import was also seen as part of the government’s efforts to curb cheap imports and support domestic corn prices.

    But buyers in the world’s No.2 corn consumer have turned to non-traditional exporters, including Bulgaria and Ukraine, to fill the gap following the restrictions on U.S. supplies. There has also been an increase in smuggling.

    “The wide price gap between domestic and overseas markets has spurred an increase in grain imports. Stockpile of autumn grains faces many difficulties and problems,” said Wang, according to a transcript of his speech published on China’s official government website.

    The gap between U.S. and domestic corn prices is at a record high as a huge American crop has pushed down prices while China’s support for corn growers has remained unchanged. China pays farmers 2,220-2,260 yuan (US$362.9-US$369.5) per ton for corn. U.S. corn is now at US$143 per ton.

    Commercial storage facilities should be used and more companies will be encouraged to stockpile grains in order to ensure that farmers are able to sell their crop, Wang said.(SD-Agencies)