10:16, 19.08.2009 — Новости
автор: OilWorld.Ru

DJ China Grain Prices Face Upside Risk On Poor Weather-StanChart (ENG)


BEIJING (Dow Jones)--Grain prices in China may rise in the near term as
weather conditions pose a supply risk, Standard Chartered said in a research
note Wednesday.

  The upside risk to grain prices poses a challenge for emerging markets, since
higher food prices fuel inflation and reduce households' disposable income, it
said.

  In China, a severe drought in northern grain-producing regions is potentially
bullish, though domestic analysts, including Wang Cheng of Nanhua Futures, say
it's too early to conclude that supply would be squeezed.

  But if the drought persists, some 11.3 million hectares of crop would be
affected, including 3.9 million people and 4.4 million heads of livestock stuck
with limited access to water, said Standard Chartered analysts, led by Abah
Ofon.

  The impacted areas are five northern regions: Inner Mongolia, Xinjiang,
Jilin, Shanxi and Liaoning.

  These five areas account for about 30% of China's autumn grain output, mainly
in corn, but also wheat and soy. The autumn crop is around 70% of China's total
grain production, Standard Chartered said.

  "China is generally self-sufficient in grains and, with regards to corn,
large carryover stocks suggest that it can weather a moderate drop in output,"
Ofon wrote. "However, poor weather and the need to maintain stocks at current
levels may yet prompt China to source some corn from external markets."

  Still, it's too early to tell if China would end up importing more corn, Wang
said.

  Poor weather conditions have been affecting not just China, but also other
major producing countries including Brazil, Argentina and the U.S., Standard
Chartered said.


  

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