February 19, 2009
China corn prices up on government purchases, higher wheat prices
Corn prices in China were higher in the week to Wednesday (February 18), supported by government purchases in northeast producing areas and rising wheat prices.
Corn prices in central and western areas of major producer Heilongjiang province were between RMB1,000 to RMB1,040 a tonne, up RMB20 from a week ago.
Traders were actively buying corn from farmers to compete with the government's purchases, while farmers in the two areas have less than 20 percent of the 2008 harvest on hand, down 5 percentage points on year, said analysts.
Corn prices in Heze city in Shandong, another big producing province, were between RMB1,300 to RMB1,350/tonne, up RMB40 to RMB60.
Corn prices in Shekou port in major consumer Guangdong province were between RMB1,560 to RMB1,600/tonne, up RMB10 to RMB20 from a week earlier.
However, sluggish feedmeal and industrial demand continue to plague corn prices, which may cap the price rise, the China Grain and Oils Information Network said in a note.
With the conclusion of the Chinese New Year holiday, consumption of eggs and poultry has fallen significantly. As a result, feedmeal sales volume is likely to fall by 20 percent in February from January, weighing on corn prices, said the China Feedmeal Information Network.
US$1 = CNY6.83800 (Feb 19)
