LAIZHOU, China (July 30, 2007) – Shandong Zhouyuan Seed and Nursery Co. Ltd. (OTCBB: SZSN) jumped 14 percent after market open today, rising to 32 cents a share on the news of the company’s “encouragement” by two recent research reports from a pair of China’s leading agricultural authorities – the Chinese Ministry of Agriculture and the China Seed Trade Association (CNSTA).
According to a recent statement from Shandong, both the Ministry of Agriculture and the CNSTA are expecting an “uptrend” on the price of corn in China this year, based on “forseeable demand” and a number of factors that will lead to the increase in the price of corn – factors including weather conditions; the recent increase in rice, wheat, flour, and oil prices; the increase in seed, fertilizer and diesel prices; the high demand for ethanol by many economies; and an increase in transportation prices.
“[Shandong] will benefit from the sustained growth of the market demand and will enlarge its profit margin should corn price increase according to expectations,” the statement read.
This news comes right on the tail of Friday’s announcement that the company is close to establishing new relationships with “local farmers” to guarantee that Shandong can purchase back all the seeds from its recent crop to meet the increasing demand of hybrid seeds.
“According to the data collected by us, the area of corn seed farming and producing will reach to 4.9 million acres, and the final production will be up to 1.2 billion kilograms,” Shandong president Wang Zhigang said in Friday’s statement. “Attracted by such high-potential market, we must adopt a new operation mode to cope with the increasing demand.”
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