August 25, 2011

China's corn prices surged to a new all-time high in the week to Wednesday (Aug 24) amid thin supply ahead of the harvest and robust demand from the expanding hog sector.

In eastern China's Shandong province, home to China's major corn processors and feed mills, corn prices rose more than 2% from a week earlier to as high as RMB2,560 (US$400)/tonne. Prices in northeastern China, the major producing area, also rose, around 1% to as high as RMB2,260 (US$353)/tonne.

The nation's average wholesale corn price was RMB2,420 (US$378)/tonne as of August 17, up 0.8% from a week earlier, the National Development and Reform Commission (NDRC) said.

Corn prices have risen 14% so far this year, data from the NDRC, the nation's top economic planner, showed. Prices in some major consumption provinces have risen more than 20%.

The government this week cut sales of reserve corn to feed mills sharply, offering only 68 tonnes as part of a programme aimed at taming prices compared with about 21,300 tonnes last week.

Inventories with traders and state reserves are low and getting lower, but traders expect the government to release reserves of imported corn to meet demand when prices rise too sharply, traders said.

Imports of corn totalled 172,623 tonnes in July compared with just 11,233 tonnes in June, according to the General Administration of Customs.