May 9, 2007

 

China corn prices higher as farmers holding less stocks
 

 

Corn prices in major producing regions of China were higher in the week ending Wednesday as farmers had less stocks on hand.

 

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted at RMB1,100-1,240/tonne, up from RMB1,070-1,160/tonne before the weeklong Labour Day holiday.

 

Markets in China were closed from May 1 to May 7 for the holiday.

 

Prices in Heilongjiang province, another major corn-producing region in the north-east, were also between RMB1,100-1,240/tonne, compared with RMB1,020-1,040/tonne earlier.

 

Average prices in Shandong province were at RMB1,580-1,590/tonne, up from RMB1,530-1,580/tonne earlier.

 

"Shandong province now needs corn shipments from the north-east due to the short supply," said a Beijing-based analyst.

 

Farmers are also too busy to sell corn during the planting season, he added.

 

The planting season usually starts in late April and ends sometime in May.

 

Analysts said processing plants in Jilin province have been offering higher prices to traders for corn due to insufficient stocks with farmers.

 

They expect demand from the feed meal sector to pick up as early as July, helping to push corn prices higher. Corn can be used as animal feed.

 

A Jilin-based trader said that because of less stocks, corn prices will likely rise until late August, when the harvest season nears.