BEIJING, Nov 24 (Reuters) - China’s Banking Regulatory Commission (CBRC) has called on banks to urgently offer special support to the agriculture sector in the face of severe shortages of corn, cotton and sugar, among other crops.
Local media reported that the notice, issued on Monday, marked the first official admission that the country faces corn shortages, following repeated assurances from the government grain authority that the country has ample reserves. [ID:nTOE68E05C]
Special financial support should be offered to those involved in production, processing and circulation of some farm products to counteract looming shortages for short-grain rice, corn, vegetables, cotton, sugar and other crops, the commission said on its web site (www.cbrc.gov.cn).
CBRC is among several Chinese authorities that have published detailed measures as part of efforts to combat rising prices. Annual inflation rose to a 25-month high in October, largely driven by food price rises.
The State Administration of Grain last week said it would boost state sales of vegetable oils and soy on top of weekly sales of corn, rice and wheat, but many buyers of corn have been restricted from weekly bidding. [ID:nTOE6AI05S]
The regulator urged banks to boost lending to agriculture-related industries as the top priority to help stabilise farm prices.
Domestic futures prices of cotton <0#CCF:>, sugar <0#CSR:> and corn <0#DCC:> frequently hit record high levels this month before the central bank moved to tighten credit inflows to the commodity markets by raising banks’ reserve ratio twice this month, in part to reduce speculative capital.
Reporting by Niu Shuping and Tom Miles; Editing by Ken Wills