February 14, 2007

China corn prices down slightly; processing plants stop buying

China's corn prices in major producing regions were slightly lower in the week to Wednesday, as many processing plants stopped buying because they have large amounts of stocks in hand.

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted at RMB1,040-1,160/tonne, compared with RMB1,050-1,140/tonne a week earlier.

Prices in Heilongjiang province, another major corn producing region in the north-east, were about RMB1,020/tonne, down from RMB1,040/tonne in the previous week.

Average prices in Shandong province were largely stable at RMB1,510-1,570/tonne, compared with RMB1,500-1,570/tonne a week earlier.

"Processing plants have lots of stocks and are not eager to purchase more," said a local corn trader.

Meanwhile, corn futures lost momentum to rise further recently, putting pressure on cash prices, he said.

The Dalian Commodity Exchange will be closed next week for the Lunar New Year holiday, which begins on Feb 18.

Traders expect corn prices to remain stable after the Lunar New Year, supported by expectations of rising industrial demand, despite falling demand from the feed sector.