October 15, 2009
China corn prices lower as new crop enters market; output to fall
China's corn prices in major producing areas were lower after the week-long National Day holiday as new crop is entering the market.
New corn prices in Nanyang in Henan province were around RMB1,560 (US$228.53) a tonne, down RMB140 from the pre-holiday level.
New corn prices in Qinhuangdao in Hebei province were at RMB1,650/tonne, down RMB20-RMB40.
The harvest of new corn increased expectations for more supply, and several big enterprises in Shandong province first reduced the offering prices, causing buyers in consumption areas to stay on the sidelines and wait for prices to be cut more, China Corn Network said in a note.
But analysts said the fall could be limited on the government's support policies and an expected decline in output this year.
The government said earlier this week that it will continue to buy corn from farmers if prices head lower.
The market widely expected that the government will raise corn purchase prices this year.
China National Grain and Oils Information Centre, a state-supported think-tank, Wednesday cut its 2009 corn output estimates by 2.5 million tonnes from its previous report in September. It cited natural disasters in the northeast major producing areas as the reason behind the cut.
Corn output is forecast to fall 1.8 percent to 163 million tonnes, according to the centre.
US$1 = RMB6.82 (Oct 15)
