September 18, 2008

   

China corn prices mostly steady; down in some areas

   

 

Corn prices in China's major producing areas were mostly stable in the week to Wednesday (September 17), but prices were lower in some consumption regions amid sluggish demand.

 

Corn prices in Changchun city in major producer Jilin province were around RMB1,640 a tonne, stable from a week ago.

 

Prices in Qingdao in Shandong province were between RMB1,750 to RMB1,760/tonne, also unchanged.

 

But prices in Changsha in Hunan province, a major consumption area, were RMB10 to RMB20 lower at RMB1,840/tonne.

 

Although the volume of old corn stocks is declining, government sales and small amounts of corn from the recent harvest amid a slow recovery in feed meal demand prevented prices from rising, said analysts.

 

However, concern over the threat of an early frost, which may have a negative impact on corn output, helped support prices, said the Jilin Province Grain Administration in its note.

 

Trading in major producing areas was light, as farmers don't have much stock on hand, while traders stayed on the sidelines due to uncertainty over the price outlook.

 

Meanwhile, a continued decline in pork prices has damped breeders' profits and their interest in increasing the hog population, said the Dragon Grain Network.

 

The government sold 109,264 tonnes of corn from its reserves Wednesday, or 36 percent of the 306,048 tonnes it planned to sell.

 

The corn was sold at an average price of RMB1,557/tonne, down from RMB1,561/tonne a week ago.

 

The coming corn harvest is pressuring prices, but higher input costs this year will also prevent a big fall in prices, said analysts.