January 31, 2007

China corn prices mixed; likely to be stable ahead of holiday
 

China's corn prices in major producing regions were mixed in the week to Wednesday.

In Jilin, China's largest corn-producing province, the prices of average quality corn were quoted at RMB1,070-1,150/tonne, compared with RMB1,080-1,160/tonne a week earlier.

Prices in Heilongjiang province, another major corn producing region in the north-east, were at RMB1,050-1,060/tonne, RMB10-20/tonne lower than in the previous week.

"Farmers in the north-east region prefer to cash in ahead of the Spring Festival (Lunar New Year), while processing plants are not eager to purchase as they have sufficient stocks," an analyst said.

Corn prices are likely to fall further in these areas, but the decline may be limited as processing plants will buy more to stock up ahead of the week-long Lunar New Year holiday in mid-February, said Shen Wei, an analyst at Cofco Maize Co. in Beijing.

However, average prices in Shandong province rose to RMB1,500-1,560/tonne, compared with about RMB1,480/tonne a week earlier.

Farmers in the eastern provinces are not in a rush to sell, analysts said, because they use more of their own funds and hence have smaller loans to repay compared with farmers in the north-east region.

Prices in Shandong province are likely to remain stable ahead of the Lunar New Year holiday, analysts said.