April 9, 2008
China corn prices mixed as bird flu outbreak weighs on demand
China's corn prices were mixed in the week to Wednesday, with prices staying strong in producing regions but mostly lower in consumption areas.
The government failed to sell any of the 325,934 tons of corn it planned to sell during its weekly auction Tuesday, as feed meal demand in southern areas is weak.
Corn prices may remain weak in consumption regions due to the sluggish demand for feed meal, said analysts.
More bird flu outbreaks in China have tamped farmer interest in raising poultry.
China's Ministry of Agriculture on Monday confirmed an outbreak in the Tibet Autonomous Region, bringing the number of outbreaks in the country to six so far this year, compared with the three in 2007.
Corn purchase prices offered by big processing companies in Jilin province, a major corn-producing region, were at RMB 1,490 per tonne, unchanged from a week ago.
Corn purchase prices by COFCO Ltd. in Heilongjiang province, another major producing area, was at RMB 1,360 per tonne, up RMB 60 per tonne from a week earlier.
Most farmers in northeast corn producing provinces only have 10 to 25 percent of their harvest volume at hand, and the dwindling stocks will support corn prices, said China Grain Network in its analysis article.
Rainfall in these regions last week affected sales, which remained low, but the rain helped relieve ongoing drought in corn producing regions, which is good for the coming spring planting.
Corn prices in middle and southern consumption areas were weaker due to more corn from northeast producing regions.
The prices of corn arriving feed meal plants in Zhengzhou city in Henan province were around RMB 1,700 per tonne, down RMB 40 per tonne.
Corn prices in Changsha city in Hunan province were at RMB 1,850 per tonne, down RMB 50 per tonne.
Corn prices in producing regions are likely to remain strong in coming weeks, as farmers are not eager to sell due to sufficient government subsidies for spring planting.
