July 3, 2007

China's 4.5 million-tonne corn surplus makes imports unlikely

China would likely to have a corn surplus of 4.48 million tonnes in the current marketing year, making large-volume imports unlikely, an executive from Jilin Grain Group (JGG) said on Monday (Jul 2).

Although huge-volume imports are unlikely, small volume imports have not been ruled out, said Jiang Jian Hua, vice chairman of JGG.

A 2-million-tonne corn surplus is expected next marketing year, which starts in October.

State-owned JGG, based in China's top corn producing province of Jilin, is one of the country's two authorised corn exporters.

Although there has been a sharp rise in domestic corn prices, Beijing has moved to curb corn demand in the fast-growing corn processing industries, especially those producing ethanol. These measures include stopping approvals for new processing plants using corn as a raw material and encouraging its biggest processors to look for alternative sources besides corn.

China's 2006/2007 domestic demand is expected at 141 million tonnes versus production of 145.5 million tonnes.

Although domestic demand is expected to rise to 145 million tonnes in the next marketing year, it would still be below a record output of 147 million tonnes expected in the 2007/2008 year.