May 25, 2010

China has booked almost one million tonnes of grain from the US and will probably buy more, industry sources say.

"The US can double or triple sales to China, depending on their requirements, as the fastest-growing major economy uses imports to complement domestic supply and satisfy expanding local demand," said Alvaro Cordero, manager of international operations-marketing at the US Grains Council.

China purchased about 600,000 tonnes of US corn in the past month, according to the USDA. The country is securing imports and selling from state inventories to cool domestic prices that have rallied 11% in the past six months to near record levels. A reduced crop last year and planting delays have increased speculation of a supply shortage.

"China no longer sticks to 100% self-sufficiency in corn. It may import about three million tonnes this year to alleviate tightness," Ruan Wei, senior researcher at the Norinchukin Research Institute Co. in Tokyo said.

Fei Zhonghai, assistant to the general manager at state-owned Cofco Ltd, said that the country may require "large-scale" imports should the domestic harvest drop this year after delayed spring planting.

"As their economy grows, we foresee China will import consistently. It needs to rely not only on its own production but also on alternative resources," Cordero said.