December 6, 2011

China's corn prices at northeastern ports have started to pick up, buoyed by decreasing stocks of traders and rising shipment demand.

By Thursday (Dec 1), corn prices at Jinzhou and Bayuquan ports reached about RMB2,200 (US$345)/tonne, up RMB30 (US$5)/tonne over a week earlier.

Since the beginning of November, port corn prices had been dropping and this made some traders suffer big losses for their massive procurement in the earlier period, said a trader in Jinzhou.

To evade risks in price fluctuation, traders generally accelerated destocking and in the meantime held off making purchases.

With changes in traders' procurement strategy, port corn stocks had declined, which prompted rush buying of some traders with urgent shipment demand.

As purchase prices at ports were increasing, the corn prices in northeastern areas, a major corn production base in China, began to stabilise though traders were still prudent in purchases. However, farmers generally restrained sales on high expectation for prices.

Industry insiders note that the increase of port prices was supported by spot prices in producing areas instead of recovery in demand, adding that corn prices lack momentum to rise persistently.