August 28, 2012

China corn prices show positive trend as market supply remains tight

China's corn prices remain stable and show a positive trend as market supply continues to be firm before fresh crops enter the market in September.

The corn purchase price index, compiled by the state stockholder, the China Grain Reserves Corp., reached 156.43 last week, up 0.71% from the preceding week.

The armyworm plague, which affected the corn crop in some northern and northeastern areas, has basically been brought under control, and this means that speculation about the effect of the pest plague has drawn to a close.

With decreasing supply on the market, corn prices are expected to remain firm though the farm animal breeding industry is seeing a slow recovery, analysts say.

However, as marketing season of new corn is approaching, traders in producing areas are active in de-stocking, which will check sharp rise of corn prices.

The China National Grain and Oils Information Centre earlier slightly revised downwards its estimate for this year's corn output to 197 million tonnes, up 2.2% over last year.