September 4, 2008

China's corn prices in major producing areas were mixed in the week to Wednesday amid an ample supply, as new corn enters market.

Corn prices in Zhengzhou in Henan province were RMB1,560-RMB1,660 a tonne, down RMB20-RMB40 from a week ago, while the prices in Dezhou in Shandong province were RMB1,640-RMB1,710/tonne, stable from a week ago.

New corn entered the market in some regions in Hebei and Shandong provinces. A rise in supply over the next two weeks, as harvesting begins, will pressure local prices, Jilin Grain Administration said.

The incidence of disease among hogs in some areas including Henan also raised concerns regarding feedmeal sector demand.

Meanwhile, the continuing auction of reserved corn and higher input costs added to the pressure on prices, analysts said.

The Chinese government sold 102,492 tonnes of corn from its reserves Tuesday (September 2), or 34 percent of the 298,521 tonnes it planned to sell.

The corn was sold at an average price of RMB1,562/tonne, up from RMB1,555/tonne a week ago.

But analysts said with the conclusion of the Olympics and the Paralympics, processing plants near Beijing will resume production, adding a pickup in the feedmeal sector demand is expected to help ease the supply pressure.