Corn prices in China fell slightly in some places in the week to Wednesday, 29 October 2008 on rising supply from the new harvest and analysts said prices are likely to remain under pressure in the coming weeks, as buying interest is domesticated.
Corn prices in Heilongjiang province, a major production base in the northeast, fell to RMB 1,460 â€“ RMB 1,550 a tonne, down slightly from a week ago.
Prices in Jilin province, another producing region, were around RMB1,500 / tonne, also down slightly from a week earlier, according to traders.
The problem is that warehouses which are supposed to buy for the state reserves have not received bank loans to start buying, while new harvests keep coming onto the market, said a trader in Jilin province.
That will be something to look at as to have an idea as to how the prices will change in the next few weeks.
China's state reserves planned to buy 5 million tonnes of corn from the northeast production regions at RMB 1,500 / tonne to support prices and protect farmers' income.
Meanwhile, processors such as feed and ethanol producers are not purchasing much, as they have financing problems, like every one else and besides the downstream demand is also affected along with the overall economic slowdown, said a Beijing-based analyst.
Traders said stockpiles at ports in the southern China are now around 150,000-160,000 tonnes, a relatively high level, said the analyst.
With many small firms shut down because of the sluggish demand and difficult financial situations, the consumption side really looks quite weak now, said the trader in Jilin province.
US$1 = RMB 6.83 (Nov 5, 2008)