January 10, 2007

 

China corn prices mostly up as farmers reluctant to sell

 

 

China's corn prices in major producing regions rose slightly in the past two weeks as farmers became reluctant to sell in anticipation of higher prices, said market participants.

 

In Jilin, China's largest corn-producing province, prices of average quality corn were quoted at RMB1,080-RMB1,160 a tonne, RMB10-RMB20 higher compared with prices before the New Year holiday.

 

Prices in Heilongjiang province, another major producing region in the north-east, were RMB20-RMB30 lower than those in Jilin, which were about RMB 10 higher compared with the pre-holiday level.

 

"Those who sold early last year regret doing so, (as prices later gained), and they have decided to wait for higher prices," said Wang Shiliang, an analyst at Jilin Grains Centre.

 

"Farmers still have 50 percent to 60 percent  of the total harvest last year," Wang said.

 

But in contrast to farmers' anticipation, analysts and traders said corn prices would  likely remain stable before the Spring Festival, which falls in late February this year.

 

Buying by processors in the north-east has been underpinning prices, but feed demand is another story, said a trader.

 

In Guangdong province, prices have been falling slightly on rising arrivals, while feed demand remains sluggish, said the trader.

 

Prices in the major consumption region in the south fell RMB10-RMB30 to around RMB1,680/tonne.

 

As futures prices are now in consolidation and prices already gained much since last year, corn prices may remain relatively stable for some time, although in the longer term, they still have upside, said Wang.