China Corn Prices Lower

18 Dec 2008

China's corn prices in major producing areas were lower in the week to Wednesday due to a sluggish demand, despite the government continuing purchases that began in late October.

Corn prices in Qinhuangdao in Hebei province were CNY1,340-CNY1,400 a metric ton, down CNY40 from a week ago.

Prices in Dezhou in Shandong province were CNY1,260-CNY1,400/ton, down CNY60-CNY100 from a week ago.

Most traders stayed on the sidelines amid expectations of weaker consumption and ample domestic supply.

The government's planned purchase of 10 million tons of corn since October hasn't been enough to absorb the excess supply out of the total of 156 million tons of estimated output this year, said analysts.

Industrial processing plants in Jilin province have cut their purchase prices for corn, along with grain reserve houses in the area, which have been cutting prices amid a supply surplus.

Corn prices are likely to fall further amid weak domestic consumption and falling global prices - which has made Chinese corn much less competitive in the international market - even if the government issues a corn export quota, China Corn Network said in a note.