June 25, 2004

Analysts Hold Mixed Views on China's Corn Prices in 2nd Half 2004

An eFeedLink Special Report
 

Below is an abstract of the report: Analysts Hold Mixed Views on China's Corn Prices in 2nd Half 2004

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Market analysts expect China's corn prices to stay in an upward trend within a high price band in the third quarter of 2004. They anticipate prices to rise marginally in late July, and to fall in September when new corns (summer corns) from outside the main north-eastern production regions go on sales in the markets.

As for the fourth quarter, analysts are still holding diverging views in their forecast of China's corn price trend. One group of analysts anticipates that China's corn prices will take a dip in the last quarter of this year, while another group expects more upside in prices. An analysis of the various factors affecting China's medium and long-term corn price movements is discussed here.    

In May 2004, corns from areas outside the main north-eastern production regions have dwindled, while produce from the main regions, namely Heilongjiang, Jilin and Liaoning, was gradually dominating the market supply. The grains enterprises in the northeastern region would not receive subsidies from the Chinese government this year and their procurement cost for corn would stay high. 

The buying interest has not been very positive as a result. The quantity of old corn reserve that will be processed by the national grains bureaus has yet to be fixed; this is another uncertainty confronting the Chinese corn market. During the first half of this year, the quality of corn supplied to the market is mediocre. Prices of better quality corns stored in granaries are comparatively higher.  

More contents in this 2-page report include:   

• Factors that are seen would lend support to China's corn prices in the medium and longer terms
  
  
• Arguments that put forward to suggest that China's corn prices in the medium and longer terms would not rise, and may even fall