February 7, 2011

China may require up to nine million tonnes of corn imports

China may need to import as much as nine million tonnes of corn this year, following its first large purchase of US corn in more than four years in 2010, said a US Grains Council official.

"Estimates given to us were that China is short 10-15 million tonnes (394 million to 591 million bushels) in stocks and will need to purchase corn this year," USGC chairman Terry Vinduska said in a statement.

"We learned the government normally keeps stocks at 30% but they are currently a little over 5%, which may lead to imports of 3-9 million tonnes (118-354 million bushels)," Vinduska said.

The USDA has projected that China will import one million tonnes of corn in the 2010/11 marketing year ending Aug. 31, but many private forecasts are considerably higher.

China's 2009 corn harvest was reduced by a drought, and the country's demand for animal feed has been booming.

Officials from the Grains Council and the National Corn Growers Association met with analysts and industry experts who said corn demand in China remains strong because of an economy growing at 8-10% annually.

The group also discussed China's anti-dumping investigation against imports of US distiller's dried grains (DDGS).

"We found that importers would like to more than double the three million tonnes of US DDGS that China imported last year, eventually reaching 10 million tonnes in annual imports," Vinduska said.

"However, they recognise the tremendous growth shown in 2010 may need to slow down to allow internal markets to adjust. One way to slow the growth was to launch the anti-dumping case," he said.