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China New Borun Corporation (BORN) Skyrockets, Alerting NYSE

  +Follow October 15, 2013 10:31AM
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The Chinese distiller China New Borun Corporation (BORN) saw its shares spike On Oct 14 as US corn exports to China continue to increase substantially. The rise was so precipitous, however, that it caused the New York Stock Exchange to contact the company over the "unsual activity."

Some rise in share price was expected. A few days prior, a private Chinese trading firm bought 420,000 tons of corn for delivery next year to take advantage of cheap prices, leading to speculation the corn processing industry in China will ramp up considerably as the country eases restrictions on corn importation.

The increased corn supply is great news for China New Borun. The company produces lower grade edible corn alcohol that is used to make cleaning solvents, crude corn oil, and the popular alcoholic drink baijiu. China New Borun currently has two manufacturing facilities, one in Shangdong province and another in Heilongjiang province that are jointly capable of producing 160,000 tons of corn-based edible alcohol per annum.

China has been loosening its restrictions on corn importation all year to cover supply shortages, as the country has already used up their domestic supply. The Financial Times reported in September that corn imports into the country were expected to increase from 3 million tons in the 2012-13 crop year to 7 million tons in 2013-14. The price drop in corn was fortuitous for the country, and they are currently taking advantage by amping up importation even more.

China New Borun had been down this year on less than stellar earnings. However, the increased importation of corn into China will almost certainly lower the company’s bottom line. The price of corn in China has been dropping steadily, from 2,346 yuan in July, to 2,272 yuan on Oct. 16, or $363.50 US a ton (around $9.10 a bushel.) Corn is currently $4.40 a bushel in the US.

While the Chinese government strives to maintain “self-sufficiency” with their crops and avoid excessive importation it has become clear the private traders have other ideas, and companies like China New Borun reap the benefits of the sudden influx of cheap US crops that will substantially lower costs going forward.

However, the sudden jump may have more to go on than just favorable crop conditions. Following the spike in price the NYSE contacted China New Borun, as is standard when a company’s shares elevate so suddenly. China New Borun, citing company practices, declined to comment on the unusual activity.

China New Borun is up 46.72 percent to hit $2.01 a share.   

Results for BORN
Scott
17 Apr 14 06:22:52
RT @easymoneyoc: Watchlist for 4/172014: $APPY, $GSS, $CBMX, $OXYS, $VTUS, $AMCO, $BORN, $IGC, $FRO
High Octane
16 Apr 14 21:17:55
Watchlist for 4/172014: $APPY, $GSS, $CBMX, $OXYS, $VTUS, $AMCO, $BORN, $IGC, $FRO
Ahmet Greena
16 Apr 14 10:59:42
$BORN China New Borun Corporation Fourth Quarter and Full Year 2013 Earni http://t.co/uaAkoVz981
Stock Occulus
16 Apr 14 02:48:31
$BORN China New Borun Corporation Fourth Quarter and Full Year 2013 Earni http://t.co/G5GyvyTEzA
Alistair Alexander
15 Apr 14 04:41:07
$BORN Why China New Borun http://t.co/7f6nPfd7Jw
Prescott Lewis
15 Apr 14 04:27:20
$BORN China New Borun Corporation Fourth Quarter and Full Year 2013 Earni http://t.co/A2Wy4wMiAG
Vaughan Lowsley
14 Apr 14 08:54:30
$BORN China New Borun Corporation Fourth Quarter and Full Year 2013 Earni http://t.co/151xptkyr9
Marius Jackson
13 Apr 14 09:42:51
$BORN Why China New Borun http://t.co/uo6VUo6HFT
Fox Gamble
13 Apr 14 05:24:41
$BORN Why China New Borun http://t.co/0JNRfe6Lk9
PennyStockSage
12 Apr 14 07:01:34
$BORN Why China New Borun http://t.co/cr7XdacgVv
				
				
  +Follow October 15, 2013 10:31AM
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