May 31, 2007

 

China corn prices stable at high levels

 

 

Corn prices in major producing regions of China stayed stable at high levels in the week to Wednesday (May 30) on tight supply.

 

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted at around RMB1,420 to RMB1,480 a metric tonne, nearly flat versus RMB1,460 to RMB1,480 a week ago.

 

Prices in Heilongjiang province, another major corn-producing region in the northeast, were between RMB1,300 to RMB1,400/tonne, compared with RMB1,380 to RMB1,400/tonne the week before.

 

Average prices in Shandong province were at RMB1,500 to RMB1,600/tonne, stable from the week earlier by RMB1,560-RMB1,600/tonne.

 

Despite high corn prices, demand from feedmeal plants is not fully met due to tight supply. Traders said farmers only have limited corn and were not eager to sell in anticipation of higher prices.

 

With less corn available, prices are unlikely to fall before the harvest season in October, said a local purchaser.

 

To worsen the limited supply situation, market participants said rising pork and poultry prices have encouraged farmers to speed up the process of livestock raising, further pushing up corn demand as a result.

 

Corn cash prices still have room to rise by up to RMB100/tonne in the next two to three months, if the weather is favorable for new corn growing, said Kang Zhichao, a trader at Nanhua Futures Co.

 

He added that corn prices may rise by up to RMB200/tonne if the weather is unfavourable for the development of corn crop.