September 24, 2008

 

China corn prices fall in the South fall on weak demand, lower pork profits  

Corn prices in China's major producing areas were mostly stable in the week to Wednesday ( September 24, 2008), but prices in consumption areas were lower amid weak demand.

 

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

 

Corn prices in Harbin city in another major producing province, Heilongjiang, were between RMB1,570/tonne and RMB1,610/tonne, also unchanged.

 

Corn prices in Shekou port in the high consumption province of Guangdong were between RMB1,830/tonne and RMB1,840/tonne, down RMB10.

 

Corn prices were pressured by new supply from the harvest while demand remains sluggish.

 

In Henan province, 13 percent of the acreage planted in corn had been harvested as of last Tuesday.

 

But higher input costs this year, due mostly to rising crude oil prices, have limited the room for prices fall in producing areas, the Jilin Province Grain Administration said in a note published on its Web site.

 

Meanwhile, low sales volume in the government's weekly corn auctions showed weak demand.

 

The government sold 23,080 tonnes of corn from its reserves Tuesday, or 7.7 percent of the 300,198 tonnes it planned to sell.

 

The corn was sold at an average price of RMB1,541/tonne, down from RMB1,557/tonne a week ago.

 

There was a significant amount of wheat being used as feedmeal to replace corn in Shandong province, further damping demand, said analysts.

 

A continued decline in pork prices is also eating away at hog breeders' profits, resulting in the killing of pigs.

 

The average pork price had declined to RMB19.87 per kilogram as of Friday from RMB20.71/kg a month earlier, according to data from the Ministry of Commerce.

 

Analysts attending a corn conference in Dalian last week expected the government will be actively buying corn from the market this year to protect farmers' interests.

 

They expected the government to buy at least 10 million tonnes of corn, up from 6.7 million tonnes last year, according to people attending the conference.