After weeks of rising corn prices, the government announced late Monday night on its website that it would take measures to control the fluctuations.

Corn futures contracts for September delivery have risen over 6 percent since January, hitting 1,951 yuan ($285.70) per ton Tuesday. That is a massive jump considering daily trading normally fluctuates between five and 20 basis points.

Zeng Liying, vice director of the State Administration of Grain, announced that the government would open up the grain reserve in order to alleviate the price pressure. Zeng said the price increase was primarily due to the drought in South China, bad weather that pushed back the planting season, and reduced output.

Zeng emphasized the size of the national and local grain reserves, saying they will be more than adequate to address the current shortage.

Zhao Keshan, an analyst with Jinpeng Futures, agreed, adding that it was unlikely that the price increase was a result of speculation, as other media outlets have reported.

"The stockpile for corn is so large that the government could control the price more easily than other foods," Zhao said. "I don't think hot money could have been involved."

But the State-owned China National Cereal, Oil and Foodstuffs Company (COFCO), the country's largest food processor, manufacturer and trader, has already begun importing corn from the United States. Corn imports face high taxes, pushing the price up from 1,126 yuan ($164.89) per ton when the corn leaves the US to 1,962 yuan ($287.31) per ton by the time it reaches China.

According to the US Grain Council, COFCO has purchased between 825,000 and 900,000 tons of corn over the past three weeks. So far, no statement has been issued on COFCO's website, and inquiries from the Global Times were not immediately answered.

COFCO may come under heat for its decision to import from the US, the world's leading corn exporter. Nearly all mass commercially grown American corn is genetically modified (GM), a bone of contention among many Chinese. Over two hundred members and deputies of the National People's Congress and Chinese People's Political Consultative Conference signed a proposal to ban GM foods throughout the country earlier this year after reports of unlabeled GM foods being sold in supermarkets stirred up controversy.

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