October 13, 2011

Corn prices in China fell in the two weeks to Wednesday (Oct 12), as domestic supply tightness began to ease with the arrival of new crops.

In northeastern areas, the major producing regions, prices fell RMB20-30 (US$3-5), or 1%-1.5% from two weeks earlier, to around RMB2,190-2,360 (US$343-370)/tonne.

In Shandong, the major corn consuming province, prices fell by around 8% to RMB2,360-2,400 (US$370-376)/tonne.

The government is releasing 3.7 million tonnes of corn from reserves, weighing further on prices.

The national average wholesale corn price reached a record RMB2,500 (US$392)/tonne at the end of September, an increase of 23% from a year earlier, according to the National Development and Reform Commission.

"Corn prices will continue to weaken with more new-crop products hitting the market," analysts said.

Prices in major consumption areas will likely drop back to normal levels soon, as demand for feed corn has slowed in the off-season, it said.

The US Grains Council last week estimated a bumper corn crop in China of 167 million tonnes this year, an increase of 6% compared with last year.

The state-backed China National Grain & Oils Information Centre earlier said China will likely harvest 182.5 million tonnes of corn, up 3% on-year.