March 27, 2008

 

China corn prices in non-producing areas lower on weak demand

 

 

Corn prices in China's non-producing regions were mostly lower in the week to Wednesday (Mar 26, 2008) on sluggish feedmeal demand and falling purchase costs.

 

However, prices remained mostly stable in the northeastern producing provinces as farmers were reluctant to sell.

 

The prices of corn arriving inHuaian city in Jiangsu province, a non-producing region, were atRMB1,730-RMB1,750 a tonne, down RMB30-RMB40/tonne from a week ago.

 

Corn arriving in Zhangzhou port in Fujian province was trading between RMB1,680 and RMB1,700/tonne, down RMB60-RMB70/tonne.

 

Corn prices in Harbing city in the major producing Heilongjiang province were around RMB1,080/tonne, up RMB40/tonne from a week earlier while the prices in Mudanjiang in the province were stable around RMB1,020/tonne.

 

The government failed to sell any of the 325,934 tonnes of corn on offer during a weekly auction Tuesday as feedmeal demand dwindled, said traders.

 

Snowstorms in January and February heavily hit the hog and poultry industry, and demand for feedmeal is unlikely to recover until May, said a local analyst.

 

Feedmeal companies' purchasing costs in non-producing regions fell after transport bottlenecks eased after the Spring Festival, the China Grain Network said.

 

The government will purchase 4 million tonnes of corn in the northeast producing regions to fill state reserves, which will help to support corn prices there, the Jilin Grain Administration said.

 

However, corn prices in the main consumption regions are likely to remain weak for a while amid sluggish demand, it said.

 

(US$1=RMB 7.02)