November 2, 2006

 

China's corn prices largely stable, demand to rise

 

 

China's corn prices held mostly stable in China in the week to Wednesday (Nov 1), while demand is expected to rise over next two weeks, as state warehouses and grain traders start buying, analysts said.

 

In northern and central China, corn prices were quoted at RMB1,150-1,200 a   tonne, little changed compared with a week earlier.

 

In Jilin, China's largest corn producing province, prices of average quality corn were quoted around RMB1,200/tonne, down RMB40 from last week.

 

The average price in Heilongjiang province, another major producing area, was almost unchanged at RMB1,200/tonne.

 

"Little change was seen in corn prices on the spot market this week, with demand holding relatively stable," said Zeng Xuezhou, an analyst at Beite Futures Co.

 

"Trading was quite as corn processing companies were only large buyers in the northeast lately," said Wang Shiliang, a trader at Jilin Grain Centre.

 

"State warehouses and grain trading companies will begin to make large purchases soon with new harvest expected to come to the market on a large scale in two weeks," he added.

 

Jilin and Heilongjiang are located in China's north-east.

 

Meanwhile, corn prices in Guangdong province, one of the largest consumer areas in the South, were quoted at around RMB1,430/tonne, nearly the same from last week.

 

This year's corn prices are higher than those in the same period last year, thanks to rising industrial demand, analysts said.

 

"Corn processors are acquiring more corn at relatively higher prices this year," Wang said.

 

As a result, corn prices are expected to rise over next couple of weeks, with state warehouses and grain traders also expected to take in more, traders said.

 

"State warehouses and grain trading firms, seeing demand from corn processors rising steadily, will probably buy more corn this year than they did in the past," Wang said.