March 14, 2007

China corn prices mixed, but could fall as supply rises
 

China's corn prices in major producing regions were mixed in the week to Wednesday, but prices may face downward pressure in the near term.

In Jilin, China's largest corn-producing province, the prices of average-quality corn were quoted at RMB1,040-1,120/tonne, lower than RMB1,060-1,160/tonne a week earlier.

Prices in Heilongjiang province, another major corn producing region in the north-east, were at RMB960-1,080/tonne, compared with about RMB1,020/tonne in the previous week.

Farmers in north-eastern China have large amounts of corn on hand, while processing factories were reluctant to purchase due to high stock levels, traders said.

However, prices in the eastern corn-producing region were about RMB20-30/tonne higher on-week, due to short supply.

Average prices in Shandong province were at RMB1,530-1,590/tonne, up from RMB1,510-1,570/tonne a week earlier.

Farmers in this region were not eager to sell their corn stocks, which can easily be kept as reserves due to low moisture contents, said a Beijing-based analyst.

But he expects corn prices to fall further in the coming weeks, as the planting season is approaching and farmers in the north-eastern region are willing to sell their stocks for cash.

Corn prices in the east will likely be pushed lower as a result, he added.