November 2, 2010

China's corn market bullish on processing demand

China's corn price is likely to increase further due to increasing demand from processors following recent rise in the sugar price that boosted demand for corn starch and starch sugar.

Now, the corn harvest in northeast China, the major corn producing region, has effectively come to an end. But the sales volume is unusually slim, due to farmers' reluctance to sell.

In a bid to secure supply, some food processors in northeastern and northern China have offered higher prices to lure farmers, which will in turn drive up corn prices in general.

Taking into account the need for the government to replenish stocks after massive sales of state reserve corn, market observers expect that the domestic corn market will remain bullish in the mid and long term, due to faster increase in overall demand.