January 24, 2011

 

China's 2011 agriculture imports seen to grow

 

 

China's grain imports generated the biggest significant gains among China's commodity purchases last year, indicating greater demand and liquidity that will herald more imports in 2011, according to analysts.

 

Led by a surge in corn shipments from the US, Chinese grain imports in 2010 surged as the rise of large-scale livestock farms and a shift in diet patterns dented Beijing's policy of self-sufficiency in the sector.

 

China imported 1.57 million tonnes of corn last year, an 18-fold increase on year, the General Administration of Customs said Friday (Jan 21), confirming semi-official statistics released earlier this week.

 

Private-sector and exporter estimates show China may import one to two million tonnes of corn this year, a sharp increase from when corn imports were just 49,000 tonnes in 2008 and 83,000 tonnes in 2009.

 

Standard Chartered economist Stephen Green has also suggested that productivity growth in China's grain sector is likely to slow in coming years, making corn an "obvious candidate" for higher imports.

 

Higher demand in 2011 is coming from the rise of large-scale hog farming to feed China's growing appetite for meat, Deputy Agriculture Minister Wei Chaoan said last month.

 

Wheat imports were also higher last year, rising 36% to 1.2 million tonnes in 2010, the customs department said.

 

This year, four cargoes of around 200,000 tonnes of feed wheat have already been sold to Chinese buyers led by state grain trader Cofco Ltd., a person familiar with the situation said Thursday (Jan 20).

 

Australia's major wheat exporters are all involved in talks with Chinese buyers, the person said.

 

The rising grain imports were driven by still-loose credit conditions, fuelling inflation to three-year highs towards the year-end.

"The deluge of liquidity that has flooded (the system) over the past year continues almost unabated," said Alistair Thornton, an analyst with IHS Global Insight. "Despite December's slight retreat in the consumer price index, the demand side of the inflationary picture remains unchanged."

 

Soy imports last year reached a record 54.8 million tonnes, China Customs said Friday (Jan 21).