September 7, 2009

China's corn prices are likely to rise further next year on declining output and rising demand, a senior industry participant said Friday (Sept 4).

The country's total corn output in 2009 is expected to fall 19.97 million tonnes or 12 percent to 145.94 million tonnes due to an ongoing serious drought, Li Qiang, chairman of Shanghai JCI, a commodities consultancy firm, said during a conference.

Meanwhile, with a recovery in the economy, demand for corn for use in feedmeal will rise in 2010, tightening supply, he said.

Corn futures traded on the DCE are likely to break through RMB1,800/tonne soon as a result and could rise above RMB1,850 if there is an early frost to further affect output, he added.

On the Dalian Commodity Exchange Friday, the benchmark May 2010 corn contract settled down 0.2 percent at RMB1,748/tonne.

US$1 = RMB6.83060 (Sept 7)