November 25, 2005
China's corn prices seen weak on bird flu fears
Chinese corn prices were mixed in the week to Thursday, as traders expect prices to remain weak due to concerns of a rise in bird flu outbreaks.
In Jilin, China's largest corn-producing province, prices for average quality new corn were quoted Thursday RMB980-1,030/tonne, after the removal of excessive moisture, largely steady from the RMB960-1,040/tonne a week ago.
Trading picked up slightly, as more farmers began to sell their new crops.
Nonetheless, overall trading remained subdued because the newly harvested corn contained a higher than normal amount of moisture, and buyers remained cautious amid frequent outbreaks of bird flu across the country, a trader said.
In eastern Shandong, one of China's major corn-producing and corn-consuming provinces, prices for average quality corn produced in the province were quoted at RMB1,100-1,220/tonne, mostly flat from a week ago.
However, buying from feed makers slowed due to a slump in feed sales.
"In the past month, our sales volume has fallen by 30 percent on month, despite feed prices having fallen by an average of RMB50/tonne," said a trader with a large feed maker in Shandong. "We don't expect any significant recovery toward the year end."
Of the raw materials that the feed maker uses, corn constitutes 60 percent and soymeal constitutes 30 percent.
Soymeal is a soybean by-product, and its prices have also been affected by bird flu worries.
Since October, China has reported more than 20 outbreaks of bird flu, which have resulted in the killing of millions of fowls. In addition, the disease is confirmed to have killed two people.
In Dalian, a major gateway in Liaoning province for grains produced in north-eastern China, FOB corn prices were quoted at about RMB1,180-1,200/tonne, lower than the RMB1,200-1,210/tonne a week ago.
In Guangdong, a large corn-consuming province in southern China, corn prices were around RMB1,280/tonne, lower from the RMB1,300/tonne a week ago.
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