July 19, 2007

 

China's corn prices fell slightly due to dwindling demand

 

 

Corn prices in China were mostly steady in the week to Wednesday on high costs, but prices fell slightly in some regions due to expectations of dwindling demand.

 

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted around RMB1,400-RMB1,520 a tonne, unchanged from a week earlier.

 

Prices in Heilongjiang province, another major corn-producing region in the northeast, were at RMB1,300-RMB1,420/tonne, stable from the week before.

 

Average prices in Shandong province were at RMB1,540-RMB1,620/tonne, unchanged from a week earlier.

 

High storage costs helped to support corn prices, but the market expects corn prices to fall in the near term under supply pressure.

 

Traders started to increase their sales amounts in expectations of declining prices, said grain information provider alibaba.com.

 

As China's pork supply is likely to tighten due to the spread of deadly blue ear disease, analysts said feedmeal prices, including for corn and soymeal, will fall toward the end of this year.

 

Trading volume was light as most feedmeal processing plants have enough stocks for another one or two months, said China Corn Network.

 

However, industrial consumption will help to support corn prices somewhat in the short term, thus prices are unlikely to tumble, it said.