China expected to increase corn imports

China will buy more US corn before the domestic harvest in October, but government reserves that can be sold into the market will cap imports well below 10 million tonnes, according to New Hope Group.

 

China, the world's No. 2 corn consumer, has purchased nearly one million tonnes of US corn since late April, the highest since 1995, after a drought hurt the harvest last year and rising feed demand pushed prices to record highs.

 

New Hope Group and its subsidiary Liuhe have been some of the main importers of corn this year, testing China's resolve to remain self-sufficient in the grain.

 

"Demand for corn from breeding sector will keep on growing while there is limited farmland to grow corn. Corn supply will be tightly balanced and China may need to import in some years due to poor harvests," said Liu Yonghao, chairman of China's largest private agricultural conglomerate New Hope Group.

 

"Going forward, I do not think we will see any long-term need to import corn in large volumes and if the weather is good, China could even have a surplus from a good harvest," said Liu.

 

Liu said China's growing demand from both livestock and corn processors, and limited farmland, meant it has to import in some years especially if the harvest is damaged by bad weather.

 

Up till now, such a view would be heresy to state planners, who have long insisted that China must grow enough corn to meet its own needs.

 

"After years of bumper harvests, reserves are still quite high. The government has been releasing reserves, which could curb the price rise of corn to some extent," said Liu.

 

Liu said imports this year would not exceed 10 million tonnes, a figure that is well beyond most estimates.