Corn prices in China skyrocket due to bad weather and high shipping costs

Harvesting of wheat in Wei county of Handan, China, June 11, 2021. REUTERS / Tingshu Wang

By Hallie Gu and Gavin Maguire

BEIJING / SINGAPORE, Nov 12 (Reuters) – Corn prices in China climbed to multi-month highs despite the advance of the harvest, as bad weather complicated harvesting in the fields just as record energy prices they raise drying and logistics costs for grains, analysts and operators said.

Last crop corn futures on the Dalian Commodity Exchange are up nearly 9% in the past month to their highest level since June, while spot markets in the east and south rose sharply in the last days.

China is the second largest consumer of corn in the world.

“Rains and snow delayed sales of the new crop to the market in Liaoning (province), and in the north-west and north regions, while logistics in Liaoning ports were suspended due to bad weather,” said Meng Jinhui, Shengda Futures Senior Analyst.

Liaoning produces 7% of China’s corn and is home to ports that distribute the grain to other northeastern provinces, including Heilongjiang, the largest producing province.

Spot corn at the major grain market in east China’s Shandong Province jumped to 2,890 yuan ($ 451.81) a ton this week, from less than 2,650 yuan earlier this month, after snowstorms will hit north and northeast China and block crop shipments.

“Farmers have a habit of drying the grain in the fields and selling it to operators just after harvest, in good weather. But the rains and snow have disrupted operations,” said Li Hongchao, an analyst at Myagric.com .

Corn prices have also skyrocketed due to rising harvesting and drying costs for the new crop, the country’s agriculture ministry said in its monthly crop report issued this week.

China’s grain drying facilities run primarily on coal. Some plants have closed in recent weeks due to record coal prices and to comply with government orders to reduce consumption.

Prices of wheat, a substitute for corn in feed rations, have also increased due to strong demand from milling plants and the livestock sector.

($ 1 = 6.3965 Chinese yuan)

(Reporting by Hallie Gu in Beijing and Gavin Maguire in Singapore. Edited in Spanish by Marion Giraldo)



Reference-www.infobae.com

Leave a Reply

Your email address will not be published. Required fields are marked *