March 8, 2006

 

China corn prices up marginally
 

 

Corn prices in major producing regions of China rose in the week to Wednesday as processors actively bought in anticipation of higher prices, analysts said.

 

In Jilin, China's largest corn-producing province, the price of average quality corn with little moisture rose by RMB30 from the previous week to around RMB1,180-RMB1,220 a tonne.

 

The average price in central China's Henan province was up RMB10 at RMB1,190 a tonne.

 

Although farmers have been actively selling with the approach of spring plowing, processors are even more eager to buy as they expect prices to rise further, said Wang Shiliang, an analyst with Jilin Grains Center.

 

However, prices in Guangdong province, a major consumption region in the south, fell RMB30 to RMB1,380 a tonne, due to lower demand amid high arrivals.

 

China Sunday suspended the supply of live poultry and pet birds to Hong Kong after confirming a new human death from bird flu in Guangdong province over the weekend.

 

As the province is the main provider of live poultry to Hong Kong, demand for corn, which is a major source for animal feed production, has been shrinking, while concerns over bird flu has also weighed on local demand, Wang said.

 

Meanwhile, prices in Dalian, a major port in China's north-east Shandong province, where corn is transported from the north to the south, fell accordingly by RMB20 to RMB1,300 a tonne.

 

"Generally, the price of corn will probably remain stable in the near term, perhaps slightly higher in producing regions if processors continue to buy a lot," said Wang. "A sharp rise or fall is not very likely."

 

The government suspended corn exports as of last Wednesday, as it did not extend export quotas expiring Feb 28. As a result, corn exports, except for those already contracted, would not be allowed unless the government announces an extension or releases new quotas.