September 8, 2011

China's corn prices climb further ahead of harvest

China's corn prices rose to a record high in the week to Wednesday (Sep 7), as supply was tight ahead of harvest, but upside is limited as the new crop is expected to hit the market soon.

In northeastern China, a major producing area, purchase prices rose around 1% from a week earlier to as high as RMB2,300 (US$360)/tonne, while in top hog-producing provinces of Sichuan and Jiangxi, corn prices rose around 1% to RMB2,610 (US$409)/tonne - the highest price nationwide.

China's average corn prices have risen 15% in the year to date, to around RMB2,440 (US$382)/tonne, data from the National Development and Reform Commission, the nation's top economic planner, showed. Prices in some major consumption provinces have risen more than 20%.

China is expected to see a record corn harvest this year due to the increase in acreage.

Despite huge demand, Chinese corn importers will not buy US corn as prices are now much higher than local prices, Shang Qiangmin, director of the state-backed China National Grain & Oils Information Centre, said Monday.

In the 2011-12 marketing year that began September 1, China will likely import only around 2.5 million tonnes of corn, compared with market forecasts of up to seven million tonnes, as corn supply and demand are now balanced.