The shutdown of Asia’s largest maize refiner has left thousands of corn farmers in north-eastern China unpaid, adding to the unintended consequences of China’s policy of artificially propping up corn prices.
China this month cut the price at which its state reserves buy corn, but maintained the minimum price well above international market prices. Inflated Chinese prices have caused state reserves to bloat and attracted unprecedented imports while destroying margins for corn processors, feed companies and other private agricultural firms that are the mainstay of the rural economy.
Global Bio-Chem Technology, the third-largest corn refiner in the world, has suspended all operations, Chinese media reported at the weekend, after announcements by the company that some of its lossmaking production lines had been halted. Calls to Global Bio-Chem went unanswered and the local government declined to comment.