January 25, 2011

China's grain imports surge in 2010

China's grain imports soared at record pace in 2010, led by corn, which saw a 19-fold increase in import volume on-year, according to data released on Friday (Jan 21) by the General Administration of Customs.

Corn imports in 2010 hit 1.57 million tonnes, up from just 49,000 tonnes in 2008 and 83,000 tonnes in 2009. Wheat imports hit 1.2 million tonnes, up 36% on-year, while rice imports gained nearly 29,000 tonnes from a year earlier.

On the other hand, cotton imports in 2010 soared to 2.8 million tonnes, nearly double the 2009 level, while sugar imports also rose 66% on-year, according to the customs authority. The surge in agricultural goods imports by China is widely expected to continue into 2012 to meet the rapid increase in domestic demand.

While China has been constantly emphasising self-sufficiency in grain supply, the surging domestic demand and continuously declining farm productivity - coupled with growing land and water shortages - have forced the country to increasingly look overseas for supply.

Consequently, China's grain market is likely to be closely linked with the global market, exposing the country more to the global commodity price volatilities.