September 20, 2011

Only one-fourth to one-fifth of new corn harvest in northeast China is expected to reach the market in December due to farmers' expectations of further price rises.

Most farmers said they would not sell their corn until next March, by the time the corn cannot be kept any more. Only a few farmers who were in need of money decided to sell the corn in December this year.

Planting costs have increased in northeast China, the country's largest corn producing base, due to rising labour costs, according to a survey conducted by the Dalian Commodity Exchange (DCE).

Currently, local farmers said this year's labour costs were 30%-40% higher than last year's RMB80-100 (US$12-16) per person each day.

The DCE were bullish about corn prices and estimated that wet corn would be RMB1.6 (US$0.25)/kg and the dry corn price RMB2.1 (US$0.33)/kg. These prices would be the minimum prices to sell the corn.