China corn prices up amid limited supplies

Corn prices in China's major producing areas were higher in the week to Wednesday (Apr 14), as supply remained tight despite a move by the government to sell the grain to meet rising local demand.

Corn prices in Jiamusi in Heilongjiang province were RMB1,640 (US$240) a tonne, up RMB20/tonne (US$2.9) from a week ago. Corn prices in Changchun in Jilin province were also RMB20/tonne higher at RMB1,800/tonne (US$264).

The government Tuesday (Apr 13) sold all 500,200 tonnes of corn on offer in a market operation in the country's northeast, as it sought to meet strong demand and curb rising prices.

It set base prices for the corn between RMB1,560/tonne (US$229) and RMB1,600/tonne (US$234), while actual sales prices were in a RMB1,560-RMB1,840/tonne (US$229-US$270) range.

Cash corn prices in these areas are now in a range of RMB1,560-RMB1,800/tonne (US$229-US$264).

The tight supply in the northeast was due to a decline in corn output last year and big, government-subsidised purchases made by feedmeal companies earlier this year.

While traders in southern China are seeking to import large volumes of corn to ensure cheaper supply, analysts said the government will be cautious in allowing big corn imports due to concerns grain security could be affected.

The market expects the government to offer a total of 1.9 million tonnes of corn to producing areas in the northeast from its reserves, but even that amount would be insufficient to meet local demand, said an analyst with Chicorn Network, adding that cash prices will continue to rise.