November 8, 2007

 

China corn prices higher as processing plants raise prices

 

 

China's corn prices were higher in the week to Wednesday (November 7), as many industrial processing plants raised purchase prices.

 

Corn prices at Dalian port were between RMB1,540 to RMB1,580/tonne, up from around RMB1,540/tonne in the previous week.

 

In Changchun city in Jilin province, a major corn producing region, corn prices were between RMB1,400 to RMB1,460 a tonne, compared with around RMB1,440 tonne a week earlier.

 

In Harbin city in Heilongjiang province, another major corn producing region, corn prices were around RMB1,340/tonne, unchanged from a week ago.

 

Industrial processing plants in northeast China don't have much stock on hand, while farmers were reluctant to sell due to production cuts, said Jiang Jianhua, Jilin Grain Group Co.'s vice president.

 

"All prices are rising, and it will be abnormal if corn prices don't go up as well," he added.

 

China's consumer price index rose 6.2 percent from a year earlier in September, down from a 6.5 percent growth in August, which marked a record high not seen in a decade.

 

The China National Grain and Oils Information Centre Wednesday said domestic corn output this year is estimated to total 148 million tonnes, down 1 million tonnes from its estimate last month.

 

Corn output last year was 145 million tonnes, according to the government-backed CNGOIC's data.

 

However, most non government-backed agencies have expected corn output this year to match last year's production at best.

 

Looking forward, corn prices are likely to continue rising, as processing plants will have to raise prices further to get sufficient supplies, said fao.com.cn, a grain information provider.

 

However, traders said the price rise will be limited by upcoming new corn supply.