December 19, 2007

 

China corn prices steady; buyers stay on sidelines

 

 

Corn prices in China remained little changed in the week to Wednesday (December 19, 2007), with traders and consumers staying on the sidelines, expecting stable prices in the short term.

 

In Jilin, China's largest corn-producing province, farm prices of average quality corn were quoted at RMB1,080-RMB1,320 a  tonne, little changed from last week.

 

In Heilongjiang, another province in the northeast, farm prices were quoted around RMB1,200/tonne, unchanged from a week earlier.

 

"The impact of the government's latest measure to cut exports is rather (heavy) on market sentiment - people have become more cautious," said Wang Shiliang, a trader at Jilin Grains Center.

 

China's Ministry of Finance said Monday the value-added tax rebates on exports of soybeans, corn, wheat, rice and their products will be eliminated effective Thursday.

 

"The spot market hasn't yet responded to that, perhaps because the exported corn among the total production is relatively small," Wang said.

 

The state-backed China National Grain and Oils Information Center forecast China's corn output this year to rise 1.7 percent to 148 million tonnes.

 

Total exports in January-November rose 85 percent on year to 4.87 million tonnes, data provided by the General Administration of Customs showed.

 

Analysts said market participants have acknowledged the cues from the government that it will take serious measures to intervene in any price hikes in the short term.

 

In Guangdong province, a major consumption region in the south, prices were quoted at RMB1,860-RMB1,870/tonne, unchanged from last week but RMB100 lower from a month ago.

 

In Tuesday's government auctions, nearly 30 percent of the planned 500,000 tonnes were sold, with an average price of RMB1,758/tonne.

 

RMB1 = US$0.1355 (Dec. 19)