June 12, 2008

 

China corn prices stable in producing areas; lower in south

  
 

China's corn prices in major producing regions were stable in the week to Wednesday (June 12, 2008), but prices fell in southern consumption areas.

 

Corn prices in Changchun city in the major producing province of Jilin were between RMB1,600-RMB1,620 a tonne, little changed from a week ago.

 

Corn prices in Harbin in Heilongjiang province were around RMB1,540/tonne, stable from the week before.

 

Dwindling corn stocks in producing regions helped to support corn prices, but most state reserve houses have stopped purchases, said China Agricultural Network.

 

However, corn prices in Qingdao city in Shandong province were around RMB1,720/tonne, down RMB20/tonne.

 

Traders were opting to buy new wheat during the harvest season, leaving demand for corn weaker, said analysts.

 

Corn prices in southern areas were also lower as feedmeal processing plants slowed down their purchases.

 

Corn prices in Nanning in Guangxi province were at RMB1,820-RMB1,860/tonne, RMB60/tonne lower.

 

The China National Grain and Oils Information Centre raised its corn output estimate for this year to 154 million tonnes in its report last week from the 149 million tonnes it expected last month on an expansion in acreage.

 

The expectations for higher corn output and the government's corn auctions are having a negative effect on prices.

 

This week, the government sold 98,800 tonnes of corn from its central reserves, or 25 percent of the 393,900 tonnes it planned to sell, at an average price of RMB1,762/tonne.

 

Analysts expected corn prices to remain strong in northern producing regions while falling further in consumption areas in the near term.

 

China's strong wheat harvest may cap any rise in wheat prices, attracting more feedmeal processing plants to use wheat and curbing the corn demand, the China Corn Network said.