June 27, 2007

China's corn supply getting tight on strong industrial demand
 

China's corn supply is getting tight due to strong growth in industrial consumption, despite a possible increase in stocks this year, the Ministry of Agriculture said Wednesday (Jun 27).

Corn supply in the 2006/07 crop year is expected to rise 6.2 percent from a year earlier, while demand will rise by 4.6 percent on-year, it said in a statement published on its website.

Feedmeal consumption and industrial consumption will rise 1.6 percent and 18.8 percent respectively, while food consumption will decline 6.9 percent, it said. The ministry did not provide any reasons for the estimates.

Despite a rise of about 3 percent in the country's total planting area this year, corn prices are likely to rise further once the feedmeal sector recovers, the ministry said, without giving a timeframe. However, room for a further increase will be limited, it added. No comparative figures were provided for the planting area.

China has completed most of its corn and soybean planting for this crop year.

China planted 26.9 million hectares of corn last year, according to a forecast from the China National Grain and Oils Information Centre.

The average wholesale price of corn in producing regions was RMB1,432/tonne in May, up 17 percent on-year, said the ministry.

The ministry also cited National Bureau of Statistics data as saying that China's total soybean planting area declined 4.6 percent on-year to 8.87 million hectares this year amid reduced profits.