January 31, 2008

  

Corn prices in south China higher on heavy snow

 

 

Corn prices in China were mixed in the week to Wednesday, with prices lower in northern producing regions but higher in the south due to bad weather.

 

Corn purchase prices in Jilin province, a major corn producing region, were between RMB1,060-RMB1,160 a tonne, down RMB20 from a week ago.

 

Corn prices in Inner Mongolia, another major producing region, were around RMB1,320/tonne, around the same level as last week.

 

Corn prices in south Hunan province were between RMB2,000-RMB2,100/tonne, up RMB50-RMB100 from a week earlier.

 

Farmers in producing regions were more eager to sell corn to prepare for the coming Lunar New Year holiday in early February.

 

But the government's regular sales have also dampened their hopes of a rise in corn prices, said the China Corn Network.

 

The government sold 59,000 tonnes of corn from state reserves Tuesday, or 11.8 percent of the 499,800 tonnes it had planned to sell.

 

Including this sale, the government has sold 611,430 tonnes of corn from its state reserves since December, or 15.3 percent of its planned 4 million tonnes. The sales are aimed at stabilizing domestic feedmeal prices.

 

Besides the weekly sales, the state reserve companies have also been buying corn in major producing regions to fill their stocks.

 

Although the purchases are not large in volume, they have helped support prices, said Liu Gang, an analyst at grain consultancy firm Shanghai JCI.

 

The worst weather in decades in central and southern China has made transportation of corn more difficult, and the annual mass movement of people ahead of the Lunar New Year holiday has also put pressure on transportation.

 

Analysts expect corn prices to stay stable around the Lunar New Year due to reduced trading volume.

 

US$1=RMB 7.186 (Jan 31)