January 8, 2008

Rising animal production to provide firm support to China's corn prices

Rising animal production will support steady growth in China's corn market in 2008, according to experts from the Ministry of Agriculture.

The steady growth was attributed to the state's efforts in controlling animal diseases and policies supporting the development of animal production.

Corn prices are unlikely to soften as it would be riding on the back of price increases in capital goods as well as transport and fuel charges. Rising production costs and price increases in other grains would also bring up corn prices.

China may face a 4.5 million-tonne corn shortage in the 2007/2008 year according to the USDA, another factor boosting prices.

Even as prices rise, restrictions and taxes placed to discourage corn exports are expected to help stabilize the corn market. China implemented taxes on corn, wheat, soy and grain-derived powders starting January 1.

China exported 4.87 million tonnes of corn in the first 11 months of 2007, an increase of 85.3 percent on-year.