March 21, 2007

China corn prices down amid increased supply; to stabilise in April
 

Corn prices in China's major producing regions were slightly lower in the week to Wednesday as supply picked up.

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted at RMB1,000-1,080/tonne, down from RMB1,040-1,120/tonne a week earlier.

Prices in Heilongjiang province, another major corn producing region in the north-east, were at RMB960-1,020/tonne compared with RMB960-1,080/tonne the previous week.

Average prices in Shandong province were at RMB1,480-1,540/tonne, down from RMB1,530-1,590/tonne a week earlier.

"The warmer weather makes storage more difficult, so farmers are eager to sell," said a Jilin-based analyst.

Processing plants had been reluctant to purchase corn right after the Lunar New Year holiday in mid-February due to a large amount of stocks, but they stepped up purchases this week.

But demand from the livestock-breeding sector has not fully recovered, adding pressure to corn prices, said analysts.

Corn can be used as animal feed.

A Beijing-based analyst said he expects corn prices to be stable in Shandong province in April, but they may fall a bit further in north-eastern Jilin and Heilongjiang provinces amid increased supply from farmers who want to sell ahead of the planting season beginning in April.