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China's Corn Export Price Rebounds 26% in September

By David Harman
22 Oct 2007 at 10:34 AM GMT-04:00


SHANGHAI (Interfax-China) -- China's corn exports rebounded in September from summer lows, with the average corn free on board (FOB) price up 26% year-on-year, according China National Grain and Oil Information Center (CNGOIC) statistics released today.

China exported approximately 380,000 tonnes of corn in September, at an average FOB price of RMB 1,574 ($209.71) per tonne, up 5.14% from August.




Heilongjiang Province's corn export FOB price jumped to RMB 1,547 ($206.12) per tonne in September, up 6.47% from August, while the FOB price of corn exported from Liaoning Province increased 4.91% to RMB 1,600 ($213.18) per tonne.

China's corn exports have grown rapidly since the start of the year 4.53 million tonnes by the end of September, mainly due to the country fulfilling contracts signed last year.

China's corn imports only amounted to 1,392 tonnes in September, and 10,167 tonne from January to September, down 83% from the same period last year, due to rising domestic corn output and soaring international corn prices this year.

Corn futures tumbled on the Dalian Commodity Exchange (DCE) today, with the most traded May 2008 contract falling 1.02% to RMB 1,642 ($218.77) per tonne and continuing to fluctuate at low levels during most the day.

"Corn futures may keep fluctuating between RMB 1,627 ($216.77) and RMB 1,662 ($221.44) in the short term," said Zhang Xiangdong, analyst from Daye Futures.

In the spot market, corn prices kept dropping. Stale corn stockpiles remain unsold as fresh corn came onto the market, though corn demand from feedstuff manufacturers continues to drop. Corn processing companies are currently the major corn purchaser.

Commentary

The important issue here is not necessarily the rapid growth in exports or the pricing. It is the fact that 4.53 million tonnes have been completed out of a total 4.8 million tonne export quota, and that there will be no more additional quota's granted this year.

Furthermore, next years quotas will be limited to 3 million tonnes. This lower quota is due to increased domestic demand which is quite likely to result in a shortfall in the near future.