June 1, 2011

 

 

China's corn imports this year will likely rise several times over last year's volume as increasing rural incomes underpin steady growth in pork consumption, according to Rabobank International Tuesday (May 31).

 

"It's hard to estimate [this year's corn import volume] exactly, but it may be several times larger than last year," said Chenjun Pan, a Beijing-based expert on food and agribusiness research for the bank, agreeing that this would mean at least double last year's volume.

 

Corn is an important component of feedmeal for the rising hog population in China, which has sharply rebounded from the culling that followed outbreaks of foot-and-mouth disease and swine flu in previous years.

 

China's hog population is likely to rise 1% this year from 453 million head in 2010, driving historic increases in China's corn imports, she said.

 

"The (demand) pressure on corn is coming from large hog farms that are entering the industry, while small farms are exiting the industry," she said.

 

Smaller hog farms tend to rely less on corn for feed purposes, using more non-conventional byproducts of rice and wheat crops, whereas large-scale farms use conventional feed in which corn is a heavily featured component, Pan said.

 

Last year, China imported 1.6 million tonnes of corn, a 15-year high that was 17 times larger than the volume imported in 2009. This year, the country is estimated to have already purchased more than one million tonnes of corn as of last month.

 

Demand for corn is rising alongside consumption of soy, of which China's imports also mostly go into feedmeal. About 70% of the country's consumption is currently covered by imported soy. That percentage will rise in coming years, though the pace of increase will slow, Pan said.

 

Still, domestic pork consumption is expected to post only a small increase this year, mostly due to rising incomes in rural areas where consumption is still fairly low.

 

"In urban areas, [demand for] pork is now relatively inelastic to income because of its status as a staple meat," meaning that consumption of pork in urban areas is not affected by price fluctuations, Pan said.

 

China's pork consumption this year may reach 51 million tonnes, versus 50 million tonnes last year, she said. Mutton consumption is also likely to rise slightly to 4.1 million tonnes in 2011 from 3.98 million tonnes last year.

 

In contrast, beef consumption is likely to fall this year due to higher prices as beef output declines.

 

Beef consumption in 2011 may slip to 6.5 million tonnes from 6.53 million tonnes last year, she added.