August 19, 2010

 

China's corn prices leap on fear of shrinking reserves

Corn prices in China's major producing areas rose in the week to Wednesday (Aug 18) following concern about dwindling government corn reserves.

 

Prices in Qinggang, Heilongjiang province, were around RMB1,900-1,940 (US$280-$286)/tonne, up RMB40 (US$6) from a week ago.

 

Prices in Lishu in Jilin province were around RMB1,800-1,840 (US$265-$271)/tonne, up RMB20 (US$3) from a week ago.

 

Both corn futures and physical prices have rallied on a comment last week by Zheng Chunfeng, chief executive of Dalian Northern Grains Exchange Market Co that China faces corn reserves that have dwindled "by a wide margin compared with last year."

 

The government auctioned 15.68 million tonnes of corn in 2009, of which 13.48 million tonnes came from reserves. So far this year, the government has auctioned 18.88 million tonnes of corn, of which 12.1 million tonnes were from reserves. All corn stockpiled in 2008 had been sold, Zheng said.