December 9, 2010

China's corn prices flat as government targets inflation

Corn prices in major producing areas of China were largely unchanged in the week to Wednesday (Nov 8), as government measures to roll back inflation stabilised prices.

Prices in Siping, Jilin province, were around RMB1,890 (US$284) a tonne, mostly unchanged from a week earlier.

Prices in Anyang, Henan province, were around RMB1,940 (US$291)/tonne, also mostly flat from RMB1,920-1,940 (US$288-291)/tonne a week ago.

"Policy pressure on prices has been very high, which stopped the rise in spot prices," an analyst said.

China needs to replenish its national corn reserves after a series of auctions to stabilise prices, but farmers are still adopting a wait-and-see attitude to sales, he said.

The announcement last week of a seventh consecutive annual record grain harvest in 2010, up 2.9% at 546.41 million tonnes, also helped to stabilise prices.

While the government hasn't released a detailed figure for corn output, the market widely expects respectable growth for 2010, analysts said.

Demand at a state auction of corn reserves fell sharply this week to just 6% of the volume offered, down from 19.5% a week earlier, the state-backed China National Grain and Oil Information Centre said Tuesday.