Corn prices in one of China's main growing regions have hit a record high - fuelling doubts over official estimates of a bumper crop and providing a rare glimmer of hope for Chicago investors.

Corn prices in the northeastern province of Jilin have hit 1,720 yuan ($252) a tonne, up 25% year on year.

The increase has been attributed in part to growing demand from processors to meet, in particular, orders for corn products such as starch and sweeteners.

China Starch Holdings, also based in China's north east, revealed on Tuesday that it is to double its corn starch capacity to 1.65m tonnes a year and triple its sweetener capacity to 300,000 tonnes.

Lower expectations 

However, analysts have also warned that the price rise may be a signal that China's 2009-10 crop fell short of the official estimate of 163m tonnes.

"The domestic price has risen much faster than we had earlier expected," Li Qiang, chief analyst with Shanghai JC Intelligence, told Reuters, the news agency.

"The major reason is because of a lower harvest."

The private consulting firm has pegged the crop at 140m tonnes. The US Department of Agriculture has estimated production at 155m tonnes.

USDA staff in Beijing have warned over the reliability of Chinese grain data, saying that provincial authorities are "occasionally tempted" by a subsidy regime to overstate production estimates.

Return to imports?

In Chicago, the higher Chinese prices were welcomed by GrainAnalyst.com analyst Vic Lespinasse as potentially supportive for US markets – eventually.

"A much lower [2009-10] crop could force China to import large amounts of corn for the first time in years, but don't expect this to happen for several months or more," he said.

"This is something that could have a bullish impact on our corn market in the long term."

Corn for March stood 3.25 cents lower at $3.66 a bushel in late trade in Chicago, on course for a seventh successive negative close since official US estimates last week raised prospects for global supplies.