December 3, 2009

China corn prices up amid thin volumes; farmers await higher prices

China's corn prices in major producing areas were higher in the week to Wednesday (December 2) as farmers were reluctant to sell.

Corn prices in Changchun in Jilin province were RMB1,520 (US$222.58) to RMB1,670 (US$244.55) a tonne, up RMB30-RMB50 from a week ago.

Corn prices in Zaozhuang in Shandong province were around RMB1,810/tonne, up RMB30.

There isn't much old corn left in the market and prices of new corn were high as China's corn output is expected to reduce this year; besides, supply in some areas was scarce due to earlier bad weather.

Farmers are usually reluctant to sell corn during this season as the new crop has just been harvested, and they expect prices to rise, said Ding Lei, an analyst with Jilin Grains Centre, adding the government's purchase policy helps support prices.

As a result, trading volume was very light.

But some corn users increased purchases, hiking their bidding prices for the crop.

Ding said corn prices will are likely to continue rising into the January-February period, when farmers need to repay their bank loans for earlier crop inputs.

US$1 = RMB6.82 (Dec 3)