January 10, 2008
China corn prices slightly down on government price control measures
China's corn prices were slightly lower in the week to Wednesday (January 9, 2008), pressured by the government's price tightening policies.
Corn purchase prices in Shenyang city, Liaoning province, were at around RMB1,260 a tonne, unchanged from a week ago.
The prices of corn entering feedmeal plants in Qingdao, Shandong province, were between RMB1,760/tonne and RMB1,780/tonne, down around RMB20/tonne from a week earlier.
The prices of corn entering Changsha city, Hunan province, were between RMB1,820/tonne and RMB1,880/tonne, down between RMB20/tonne and RMB50/tonne.
China sold 21,000 tonnes of corn from its state reserves Tuesday, or 4.2 percent of the 498,800 tonnes it planned to sell.
Including this sale, the government has sold a total of 481,147 tonnes of corn from its state reserves since last December, or 19 percent of the 2.5 million tonnes it had planned to sell.
However, corn prices are likely to have seen the bottom with improving demand, said analysts.
China has been buying corn in the major-producing northeast regions since late last month to fill state reserves, sources familiar with the situation said last week.
The government plans to buy at least 4 million tonnes of corn at prices around current cash prices, and the purchase is likely to last until the Lunar New Year holiday in early February, they said.
"With the ongoing purchase, corn prices will be strongly supported," said Liu Gang, an analyst at Shanghai JCI, a grain consultancy firm.
But any rise could be limited ahead of the Lunar New Year due to the government's controls of surging food prices. China will regulate grain, edible oil and meat prices ahead of the holiday in early February, the State Council said Wednesday.
China's state grain reserves are sufficient to meet domestic demand, but upward pressures on the prices are high, as global crude oil and grain prices continue to rise, the State Council said.
RMB1 = USUS$0.1377 (Jan. 10)
