December 6, 2006

 

China corn prices largely stable, trading volume up

 

 

China's corn prices held steady in major corn growing regions in the week to Wednesday, with rising demand from state warehouses and grain traders well met by farmers who have increased selling toward the year-end, analysts said.

 

In Jilin, China's largest corn-producing province, prices of average quality corn were quoted around RMB1,320-RMB1,340 a tonne, little changed from last week.

 

The average price in Heilongjiang province, another major corn producing area, increased by RMB20 to around RMB1,320/tonne .

 

"On one hand, trading volume rose as warehouses and grain traders were buying corn," said Ren Hongxia, a trader at Jilin Grain Centre.

 

"Farmers were active in selling on the other hand, in a rush to cash in for the year-end consumption," she added.

 

In northern and central China, corn prices were quoted at RMB1,350-RMB1,450/tonne, little changed from a week earlier.

 

"Feed companies and processors in northern and central provinces were seen buying more corn from Jilin and Heilongjiang lately, due to a shortage in local supplies," said Ren.

 

Meanwhile, corn prices in Guangdong province, one of the largest consumer areas in the south, remained stable around RMB1,630-RMB1,650/tonne.

 

"With fundamentals not expected to change over the short term, where corn prices will go in Guangdong is largely subject to arrivals," Ren added.

 

Corn prices will hold stable at the current levels in the near future, with supply and demand largely in balance, analysts said.

 

"Supplies will continue to increase over the next couple of months, with ongoing harvesting accelerated thanks to favorable weather conditions, which will meet growing demand from state warehouses and traders," Ren added.

 

Zhang Yifan, a trader at China Grains & Oils Group Feed Corporation, appeared to be more optimistic, saying "there is still room for further gains with demand from processors remaining strong.