March 28, 2007

China corn prices steady; processing plants reluctant to buy
 

Corn prices in China's major producing regions were largely steady in the week to Wednesday as processing plants were reluctant to make purchases.

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

Prices in Heilongjiang province, another major corn-producing region in the north-east, were at RMB1,000-1,040/tonne, up slightly from RMB960-1,020/tonne the previous week.

Average prices in Shandong province were at RMB1,490-1,540/tonne, steady from RMB1,480-1,540/tonne a week earlier.

"Processing plants are cautious about purchases as they have sufficient stocks that were bought ahead of the Lunar New Year," said Wang Shiliang, a trader at Jilin Grains Centre.

The Lunar New Year fell on Feb 18 this year.

He said processing plants are unlikely to increase purchases by a large amount before May.

China will resume collecting a railway construction fee from companies that transport grain starting in April, which may increase the cost of corn purchases, hence supporting corn prices, said traders.

But corn prices would likely stay stable, as the construction fee is not high, while sluggish demand may put pressure on prices, they added.