July 26, 2007

 

China corn prices mostly stable, with some regional softness

 

 

Corn prices in China were mostly stable in the week to Wednesday (July 25), but prices fell slightly in some regions on sluggish demand.

 

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted around RMB1,370 to RMB1,500 a tonne, lower than RMB1,400 to RMB1,520 a week earlier.

 

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

 

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

 

Traders have large corn stocks at hand, but they were reluctant to sell at lower prices due to high purchase costs.

 

However, with more supply expected, sluggish demand is likely to put downward pressure on prices, said analysts.

 

State reserve houses will likely increase sales of stock from previous crops in August to prepare for the new harvest starting from September.

 

Industrial demand for corn can be fully met in north Hebei province, Inner Mongolia province and Shanxi Province before the corn harvest in September, said Si Zhibo, sales manager at a state grain warehouse.

 

Corn demand is sluggish because of the spread of an epidemic of blue ear disease, which reduces demand for feed in the country's pig breeding industry.

 

Tightness in pork supply is unlikely to ease until the start of next year, said Chen Weisheng, vice chief of the livestock husbandry department in the Ministry of Agriculture.

 

Blue-ear disease has infected 120,144 pigs in China since June, nearly three times the number infected during the first five months of 2007, according to data issued by the ministry on July 25.