March 30, 2006

 

China's corn prices little changed; consumption picking up

 

 

Corn prices in China's major producing regions were little changed in the week to Wednesday (Mar 29) and trading remained inactive as processors were reluctant to buy, said analysts.

 

In Jilin, China's largest corn-producing province, the price of average quality corn with little moisture was largely unchanged to be quoted around RMB1,180-1,200 a tonne.

 

Big corn processors, knowing that farmers are keen to sell their stock to earn cash before spring plowing, are lowering their purchase prices.

 

"The processors have almost bought what they need, so they're in no hurry," said Wang Shiliang, an analyst with Jilin Grains Centre.

 

However, prices in major consumption provinces rose slightly in the past week as feed consumption began to pick up against low stockpiles.

 

Prices in Guangdong province, a major consumption area in the south, rose RMB10-20 to about RMB1,380/tonne.

 

The average price in Dalian, a major port in north-eastern Shandong province where corn is transported from the north to the south, rose RMB10 to about RMB1,290/tonne.

 

Guangdong province resumed live poultry supplies to Hong Kong Sunday (Mar 26), and market analysts said feed consumption growth in April is likely as long as there are no further bird flu outbreaks.

 

Meanwhile, industry players are expecting the government to issue a corn imports quota probably in April and May, though details are not known yet.

 

"Demand by local processors is still strong, and the demand isn't impacted by bird flu," Wang said.

 

Industry analysts estimate that China is to become a net importer of corn beginning from 2007, because of the quickly expanding corn processing industry.