A volunteer helps an elderly villager harvest corns in Haiyun village, Chongshou town of Cixi city, East China's Zhejiang Province, June 8, 2020. Photo: Xinhua

The price of corn in northern China has skyrocketed in recent days, driven by speculative trading and deep-processing enterprises, but an agricultural analyst reassured the market by saying the supply and demand of corn is heading toward a balance after the country's efforts of destocking. 

On Sunday, the price of corn in Northeast China's Jilin Province hit 2,250-2,260 yuan (about $323-$324) per ton, and the price in East China's Shandong Province surpassed 2,600 yuan per ton in the past week, media reports said. Corn futures traded in Dalian have grown more than 20 percent since February.

Unlike these two provinces, Henan in Central China and Hebei in North China have not seen huge price fluctuations. 

The market supply and demand of corn is heading toward a balance as China had excessive corn production capacity in 2016 and reduced its planting area thereafter, Li Guoxiang, a research fellow in the agricultural sector at the Chinese Academy of Social Sciences, told the Global Times on Sunday. 

The price rise is mainly driven by speculative trading and deep-processing enterprises in northern China that process corn into alcohol fuel, starch and sugar, according to Li. 

"The rising price will not bring about a corn shortage as China is able to ensure the supply of corn," Li noted. 

As of Thursday, 39.96 million tons of temporary reserves of corn have been traded, according to industry website cngrain.com.

Li added that demand for pig feed with corn as an important ingredient has driven the rise, but it is not the main reason for its soaring price, and China's hog production may only recover 70 percent this year compared to the pre-African Swine Fever level.

Such rising momentum may not last as China will soon welcome the upcoming supply of new corn in September—the harvest season of corn. 

Commenting on whether the escalating China-US relations may impact China's agricultural purchases from the US, Li pointed out there is no relationship between the rising price of corn domestically and worsening bilateral relations, as China bought only a small amount of corn from the US. 

According to the US Department of Agriculture, China bought 2.1 million metric tons of corn from the US through July 16, up from 315 thousand metric tons in the same period last year.

China imported 880,000 tons of corn in June, up 23 percent year-on-year, statistics by the General Administration of Customs showed. In the first half of the year, 3.66 million tons of corn were imported, an increase of 17.6 percent compared to last year.