April 10, 2007

 

China's corn supply to become relatively tight

 

 

The accelerating growth of China's domestic corn demand may turn it into a relatively tight-supply country from a basically balanced market, a senior government official said Monday (Apr 9).

 

The official's comment on the supply and demand situation of a particular agricultural commodity, which is rare, followed market speculation beginning early last year that China will turn into a net corn importer in a few years on strong growth in domestic demand.

 

"The rapid development of ethanol industries in some of the world's major corn producers is leading to a drop in global trade...China must further strengthen domestic corn production," Chen Mengshan, an official with the Ministry of Agriculture, said at a media briefing in Beijing.

 

Chen said China aims to raise corn production to 145 million tonnes in 2007 from 144 million tonnes in 2006.

 

It plans to further raise output to 150 million tonnes in 2010, when domestic consumption is expected to be around 160 million tonnes.

 

Given the limited availability of additional land for growing corn, the rise in corn output "requires stabilising the acreage and raising the yield per unit area," Chen said.

 

He added that the country will ensure meeting corn demand from the feed production and food sector, while the development of the biofuel industry will make more use of straw and other agricultural waste.

 

The government's promotion of cleaner burning, ethanol-blended gasoline in the country's major cities leads market participants to believe that the country will become a net importer of corn sooner or later, fuelling the global rise in corn prices.

 

China is currently the world's third-largest producer of ethanol fuel, with corn serving as the major raw material.

 

The country's corn imports in January-February rose 14 percent on year to 2,854 tonnes, while exports totalled 1.77 million tonnes, up 25 percent on year.