China will likely step up corn imports as U.S. prices have fallen below local prices and farmers are selling 2011 grain at a slow pace amid rains, Shang Qiangmin, director of the China National Grain and Oils Information Center, said Thursday.

Some Chinese feed mills recently signed contracts to import U.S. corn amid high domestic prices, but major buyers Cofco Group and Sinograin have yet to enter the market, traders said.

However, domestic corn supply is sufficient following a record harvest, Shang told an industry conference.

Due to excessive rains, farmers are delaying sales, reducing market supply and causing prices to soar, he said.

Stockpilier China Grain Reserves Corp., known as Sinograin, has so far bought only 1.2 million tons of 2011 corn locally for state reserves, Song Zhiyuan, an official with Sinograin, said. It bought 11 million tons of 2010 corn last year.

Feed mill demand for corn will increase slightly this year while processors' demand will stay flat this year, he said, adding that supply would be in a slight surplus.

Song also said Sinograin won't release imported corn from reserves in the near term, despite high local prices.

Sinograin bought more than 3 million tons from the U.S. to replenish depleted reserves last year.

-Zhoudong Shangguan contributed to this article; Dow Jones Newswires; (8610) 8400 7715; zhoudong.shangguan@dowjones.com

(END) Dow Jones Newswires

March 15, 2012 06:51 ET (10:51 GMT)