August 16, 2007

 

China corn prices stable despite pressure on excessive inventory

 

 

Corn prices in China were mostly stable in the week to Wednesday (August 15), though some traders faced mounting pressure to sell on excessive inventory.

 

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

 

Prices in Heilongjiang province, another major corn-producing region in the northeast, were at RMB1,300 to RMB1,400/tonne, compared with RMB1,300 to RMB1,410/tonne the week before.

 

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

 

The drought in northeast China had eased a little in the past few days following heavy rainfall.

 

About 83 percent of Heilongjiang's drought-hit area was relieved by heavy rains from last Wednesday to Saturday, according to Xinhua News Agency.

 

But the remaining area of around 1.25 million hectares, mostly in the western region of the province, was still facing drought, it said.

 

Some traders were more willing to sell because of excessive inventory and ahead of the repayment deadline for loans due from September to late October, said Heilongjiang Grain and Oils Information Centre.

 

Feedmeal demand for pigs hadn't picked up significantly, although the feedmeal demand for poultry remained strong, traders said.

 

Meanwhile, more wheat was being used as feedmeal to substitute corn due to lower wheat prices, they said.

 

Looking forward, despite high corn stocks costs, excessive supply will further pressure corn prices, according to the China National Grain and Oils Information Centre.