China corn prices mostly stable; supported by ongoing drought

China corn prices in major producing areas were mostly stable in the week to Wednesday (August 26), supported by the ongoing drought in the northeast.

 

Corn prices in Harbin in the northeastern major producing province of Heilongjiang were around RMB1,550 a tonne, stable from a week ago.

 

Corn prices in Changchun in the northeastern province of Jilin were between RMB1,540 (US$225.30) to RMB1,600 (US$234.08)/tonne, RMB10/tonne higher from a week earlier.

 

Analysts said corn output in the northeast will definitely see a reduction this year due to the drought, although total nationwide output may not be changed much from last year due to increased acreage and good growth in eastern producing areas.

 

But the drought has raised farmers reluctance to sell their crops due to expectations of higher prices, while transportation bottlenecks will help to support corn prices in the near term, they said.

 

Prices in the eastern producing areas were higher as big corn processors hiked bidding prices to compete for limited market supply.

 

High prices forced some smaller local processors to suspend production, the China Corn Network said.

 

The government sold 62 percent of the corn it planned to sell Tuesday, the highest volume sold since the weekly auctions kicked off in late July, due to price and supply concerns related to the drought.

 

It sold 1.57 million tonnes of corn from its reserves out of the 2.52 million tonnes it offered to sell.

 

US$1 = RMB6.83 (August 26)