China may see corn shortage of 10 million tonnes by 2010

China may see a corn shortage of 10 million tonnes by around 2010 due to an increase in feedmeal demand especially from hog producers, an analyst said Thursday (June 19, 2008).

The feedmeal demand from the hog sector is likely to reach 110 million tonnes by 2010, up from more than 90 million tonnes now, said Chen Shuwei, vice-general manager of Beijing Orient Agribusiness Consultant Ltd., during a conference.

However, the annual growth rate in the industrial demand for corn may slow by around 10 percent from 18-19 percent now due to the government's control of grain-based biofuels, Chen pointed out.

The country's corn output in 2010 may reach 150 million tonnes if the growth rate remains steady, while the demand may surpass it at 160 million tonnes, Chen added.

The shortage may be solved by measures such as higher corn imports, pork imports or soy imports.

Thus, the average corn prices in major producing regions are likely to rise to RMB1,800-RMB1,900/tonne, from around RMB1,600/tonne now, he said.

China exported 89,501 tonnes of corn in the first four months of this year, down 97 percent on-year.

The China National Grain and Oils Information Center expects the country's corn exports to fall by 85 percent on-year to 800,000 tonnes in the 2007-08 crop year that began in October due to government restrictions.

US$1 = RMB6.88 as of June 20, 2008