December 18, 2008
China's s corn prices in major producing areas were lower in the week to Wednesday (December 17) due to a sluggish demand, despite the government continuing purchases that began in late October.
Corn prices in Qinhuangdao in Hebei province were RMB1,340 to RMB1,400 a tonne, down RMB40 from a week ago.
Prices in Dezhou in Shandong province were RMB1,260 to RMB1,400 a tonne, down RMB60 to RMB100 from a week ago.
Most traders stayed on the sidelines amid expectations of weaker consumption and ample domestic supply.
The government's planned purchase of 10 million tonnes of corn since October hasn't been enough to absorb the excess supply out of the total of 156 million tonnes of estimated output this year, said analysts.
Although the feedmeal demand for corn and soymeal is higher ahead of the year-end holidays, expectations of weak consumption after the holiday season may have an impact on prices later, said Chu Jianhong, an analyst at Chinatex Grains & Oils Import & Export Corp.
Industrial processing plants in Jilin province have cut their purchase prices for corn, along with grain reserve houses in the area, which have been cutting prices amid a supply surplus.
Corn prices are likely to fall further amid weak domestic consumption and falling global prices - which has made Chinese corn much less competitive in the international market - even if the government issues a corn export quota, China Corn Network said in a note.