February 12, 2009

Corn prices in China's s major producing areas were higher in the week to Wednesday (February 11), supported by rising wheat prices and farmers' reluctance to sell.

Corn prices in Songyuan in Jilin province were between RMB1,330 to RMB1,350 a tonne, up RMB10 to RMB20 from a week earlier.

Prices in Qiqihar in Heilongjiang province were between RMB1,220 to RMB1,330/tonne, up RMB20 to RMB40.

In Ji' ning in Shandong province, prices were around RMB1,420/tonne, up RMB20.

The rise in wheat prices - caused by the ongoing drought - helped push up corn prices, as both crops can be used as feedmeal.

Meanwhile, farmers were reluctant to sell on expectations of higher corn prices due to the government's supporting policies on grain, said an analyst with Chicorn Network.

The government has issued a series of plans since the 2008 bumper harvest to buy a total 30 million tonnes of corn from the market to help support prices and protect farmers' interests.

The grain companies in 10 major corn producing areas bought a total of 36.71 million tonnes of corn harvested in 2008 as of Jan. 31, up 12.43 million tonnes from the same period last year, according to data from the China National Grain and Oils Information Centre.

Looking ahead, analysts said corn prices are likely to be supported by expectations that the government will purchase more corn in eastern major producing areas, while there is downward pressure as concern over bird flu and blue ear disease may damp feedmeal demand, while farmers are more willing to sell corn following the Chinese New Year holiday.

An outbreak of bird flu in China's Xinjiang Uighur Autonomous Region has killed 519 poultry in the area, while an outbreak of blue ear disease has killed more than 1,000 pigs in China's Shanxi province, the Ministry of Agriculture said late Tuesday (February 10).