October 27, 2005

 

China corn prices steady; may fall on supply, bird flu
 

 

China's cash corn prices were mostly steady in the week to Wednesday.

 

But traders said prices are poised for a fall with the arrival of new crops in the market and reports of bird flu outbreaks.

 

In eastern Shandong, one of China's major corn-producing and consuming provinces, new corn produced in the province was quoted at RMB1,180-1,240 a  tonne, slightly lower than RMB1,180-1,300/tonne a week ago, a Shandong-based trader said.

 

Trading of old corn from north-eastern provinces has slowed substantially because local new supplies have entered the market in large quantities.

 

In north-eastern Jilin, China's largest corn-producing province, the price of corn produced in 2004 was around RMB1,140/tonne, largely flat compared with prices over the past few weeks.

 

Prices for new corn ranged from RMB860/tonne to RMB1,000/tonne in the province, mostly steady from a week ago, although trading was limited due to higher water content in new crops.

 

In Dalian, a major gateway in north-eastern Liaoning province for grains produced in north-eastern China, free-on-board old corn prices were quoted around RMB1,250/tonne, marginally lower than RMB1,250-1,260/tonne a week ago.

 

New corn is expected to enter the port city in weeks and push prices lower, traders said.

 

In Guangdong, a large corn-consuming province in southern China, prices of old corn sourced from north-eastern China were around RMB1,350-1,360/tonne, largely steady from RMB1,340-RMB1,370/tonne a week ago.

 

Local traders said prices are expected to trend lower due to new corn arrivals, via rail, from Shandong and Henan provinces.

 

In addition, a series of bird flu outbreaks have damped market demand for the feed, they said.

 

China has reported an outbreak of the virulent H5N1 bird flu strain among fowl in southern China's Hunan province, which borders Guangdong.

 

Prior to this, the government had confirmed the deadly disease has spread to Anhui province in the east and the Inner Mongolia Autonomous Region in the north in the past week or so.

 

The disease had hit several regions earlier this year such as Xinjiang and Qinghai.