April 17, 2008
China corn prices mixed on imbalanced supply, demand sluggish
China's corn prices were mixed in the week to Wednesday on a supply imbalance, with prices in the northeastern producing region higher, but mostly lower prices in eastern and southern consumption regions.
Corn purchase prices in major producing Heilongjiang province were between RMB1,300-RMB1,400 a tonne, up RMB20/tonne from a week ago.
Corn purchase prices by traders in Shenyang city in Liaoning province were RMB20/tonne higher at RMB1,260/tonne.
Farmers have started to plant new corn and stopped sales. So processing plants must raise bid prices to attract volumes.
Corn prices at many ports were stronger on dwindling arrivals. At Shekou port in Guangdong province, prices were RMB10-RMB20/tonne higher at RMB1,700-RMB1,720/tonne.
In the eastern region, prices were lower on sluggish feedmeal demand.
Corn prices entering factories in Tianjin city were at around RMB1,600/tonne, RMB20/tonne lower.
The government failed to attract interest in any of the 314,284 tonnes of corn it planned to sell during its regular auction this week.
Corn prices in consumption regions are unlikely to rise much in the near term on the slow recovery of the livestock industry, an analysis published on Jilin Grain Administration said.
However, China's corn prices are likely to start rising by May due to the recovery in feedmeal demand, said Li Xigui, an analyst at the China National Grain and Oils Information Center.
The large expansion in the number of hogs raised by big farms, to compensate for the reluctance of individual farmers to raise hogs in their backyards on disease outbreak concerns, will help to boost feedmeal demand for corn, he said.
But analysts said prices may lose momentum by July and August, as state sales of reserved corn begins and the harvest season approaches.
China's 2008 corn output may rise 0.7 percent on-year to 149 million tonnes due to an increase in yield, despite a smaller planted area, according to a recent CNGOIC estimate.
