April 19, 2007

China's corn prices higher on export quota news

China's corn prices in major producing regions were slightly higher in the week to Wednesday (Apr 18), helped by news that the government has issued an export quota for corn.

In Jilin, China's largest corn-producing province, prices of average quality corn were quoted at RMB1,050-1,150 a tonne, slightly higher than around RMB1,080/tonne a week earlier.

Prices in Heilongjiang province, another major corn producing region in the northeast, were at RMB980-1,020/tonne, largely stable from around RMB1,000/tonne in the previous week.

Average prices in Shandong province were at RMB1,540-1,580/tonne, higher than RMB1,530-1,550/tonne a week earlier.

There was market talk last week that the government had decided to release an export quota of 3 million tonnes to major corn exporters.

The news was confirmed by a person familiar with the situation Wednesday, who said China has issued a corn export quota totalling 3 million tonnes to expire by the end of February 2008.

Of the total, 1.2 million tonnes must be filled by the end of June or July this year or the quota will expire, said the person.

"The news helped boost market sentiment, though an actual increase in purchases (of large amounts) wasn't immediately seen," said Wang Shiliang, a trader at Jilin Grains Centre.

Demand also increased as stocks are not sufficient ahead of the planting season in April and May.