May 6, 2013

Higher prices and improved domestic production may dampen Chinese grain imports

Chinese grain imports may fall 17 % this season from the prior period on higher corn prices spurred by US drought and increased domestic production, the United Nations' Food & Agriculture Organization (FAO) said.

Purchases may slide to 10.8 million tonnes in the 2012-13 marketing year begun Oct 1, according to a country report dated April 30 and posted on the Rome-based FAO's website. Corn imports may plunge 33 % to 3.5 million tonnes. The grain rallied to a record last year on the Chicago Board of Trade after the worst drought since the 1930s cut production in the US, the world's biggest exporter.

Higher domestic grain production also reduced demand for imports, the FAO said. China's corn crop, harvested from June to October, rose 8 % on year to a record 208.1 million tonnes in 2012, according to the report. Wheat output last year was 120.6 million tonnes, 3 % higher than 2011, while the rice crop climbed 1.6 % to 204.3 million tonnes.

China's next winter-wheat harvest, accounting for 95 % of the total production, will begin this month, the FAO said. Output is pegged at 121.02 million tonnes, up 0.3 % from a year earlier. Crops experienced favourable weather conditions early in the season, with ample moisture and cool temperatures from November to January. Dry weather that developed since mid-February in the North China Plain had a "limited" effect on national production, the FAO said.