China corn prices stable; to rise on feed demand

Corn prices in China's major producing areas were mostly stable in the week to Wednesday (Jan 20).

In some areas, corn prices have already started to rise slightly with demand supported by the Lunar New Year and subsequently by livestock birthing in early spring.

Corn prices in Dezhou, in the major producing province of Shandong, were around RMB1,880/tonne (US$275), unchanged from a week earlier.

In Harbin, Heilongjiang province, prices were also steady around RMB1,680/tonne (US$246).

In Changchun, Jilin province, prices were around RMB1,730/tonne (US$253), up RMB10/tonne (US$1.46) from a week earlier.

In Shenyang, Liaoning province, prices were around RMB1,750/tonne (US$256), also up RMB10/tonne from last week.

Though corn as a staple will see higher demand because of the Chinese New Year, the higher demand period is actually around March or April, when new livestock are born, creating more demand for corn-based animal feed, analyst Wang Cheng said.

The government's corn purchases and transport difficulties caused by snowy weather are also offering support for corn prices, Wang said.

The bullish outlook is offset by farmers' need to divest inventories as demand for cash rises ahead of the Lunar New Year, but the overall forecast is for stable to rising prices, Wang said.