March 10, 2006
China corn imports may jump 50 times next year: USDA
China may import 50 times more corn next year than in 2006, as rising incomes enable more consumers to afford meat, pushing up demand for chicken and hog feed made from grain, including corn, a USDA report said.
China may import 1 million tonnes of the grain in the year ending September 30 2007, from an estimated 20,000 tonnes this year, according to a USDA report dated Mar 1. China imported 2,366 tonnes of corn in 2004 and almost doubled that to 3,975 tonnes in 2005.
China's economic growth has increased disposable income in the country's wealthy urban areas, increasing consumption meat consumption.
A surge in Chinese imports may benefit growers in the US, the world's biggest corn producer, and increase global prices of the grain. Corn futures have risen about 9 per cent in the past year to US$2.32 a bushel on the Chicago Board of Trade.
Corn stockpiles in China, the world's second biggest grower of the grain, will drop to 35.5 million tonnes next year from 39.5 million this year as consumption outpaces production, the report said.
To meet rising demand, China's corn output will be lifted 3 percent to 134 million tonnes, the report said.
Jochen Hitzfeld, a Munich-based analyst at HVB Group, forecast a bigger drop in Chinese corn stockpiles.
China may import 12 million tonnes of corn in 2007 for its needs and to build up its corn stockpile for food security, he estimated.
Such a volume would represent 17 per cent of the global volume of corn available for export and lead to a sharp increase in prices, he said.
Furthermore, the world's largest exporter, the US, is planning to process part of its corn output into ethanol to reduce its dependence on petroleum imports, putting a tighter squeeze on supplies.
US production of ethanol will rise by more than a third, boosting US corn use to a record 11.5 billion bushels compared with production of 11.1 billion bushels last year, the Renewable Fuels Association in Washington said on Feb 17.
