February 17, 2011

China's corn prices advance on strong buying

Corn prices in major producing areas of China rose in the week to Wednesday (Feb 16), as corn processors began to rebuild stocks and state purchases resumed after the Lunar New Year holiday.

Starch companies are purchasing corn at RMB2,180-2,200 (US$331-$334)/tonne in Shandong province, up about RMB50-RMB70 (US$7-$10)/tonne from a week earlier, while prices in Liaoning are around RMB1,950-1,960 (US$296-$297)/tonne, up RMB20-RMB30 (US$3-$4)/tonne.

Supplies are limited as many farmers still have not started selling, and most only will start by late February, according to a report by China Corn Network.

China Grain Reserve Corp's participation in the corn market has also forced other traders to increase bid prices to improve their competitiveness, the report said.

Benchmark September corn futures climbed to settle at an all-time high of RMB2,464 (US$374)/tonne Monday.

China's corn prices in major ports in southern areas are likely to rise to about RMB2,400-2,500 (US$364-$379)/tonne from the current RMB2,200-RMB2,300 (US$334-$349)/tonne, analysts said.

Corn imports are an important way to ensure domestic supply, and it may import up to nine million tonnes in 2011, experts added.