May 22, 2008

  

China's corn prices rise, processing plants outbid by state reserves

 

 

China's corn prices in the major producing regions were higher in the week to Wednesday, as industrial processing plants increased their bidding prices to attract higher volumes.

 

The major processing plants in Jilin province bid corn prices at RMB1,530-RMB1,600 a tonne, up RMB20-RMB40 from a week ago.

 

However, it was outbid by the local state reserve, which came in with a bid of RMB1,620/tonne, according to Dragon Grain Network.

 

Corn prices in Harbin city in Heilongjiang province were RMB1,410-RMB1,500/tonne, up RMB20-RMB80 from a week ago.

 

Farmers were also reluctant to sell corn due to limited stocks in hand.

 

Corn prices in the southern consumption regions were higher, along with a rise in producing areas as traders are concerned the continuous rise may lead to panic buying.

 

Corn prices at the Shekou port in Guangdong province were RMB1,870-RMB1,880/tonne, up RMB20-RMB30 from a week ago.

 

Higher wheat prices are likely to support corn prices as well, said analysts.

 

As China started its minimum purchase price programme for wheat Wednesday, 10 days earlier than last year; wheat prices would be pushed higher, said a local wheat analyst.

 

However hog losses in Sichuan province due to the recent earthquake would mean a drop in demand for corn, analysts said.

 

The government sold 29,600 tonnes of corn from its central reserve Tuesday, 17.5 percent of the 168,900 tonnes it planned to sell.