July 27, 2010

Storms to hit China crops but corn yield may improve

Heavy rains and big floods across China are likely to hurt the country's crop yields, but they could also help corn production recover from last year's drought, said traders.

"Corn production on the whole is normal because the drought in previous months is being offset by rain, but it is hard to say what will happen if the heavy rain continues over the next few weeks. The rains have largely been in the south and will probably affect rice crops more, but we haven't yet assessed the full extent of the damage," said a Shanghai-based corn importer.

Floods tend to be good for corn, said Feng Lichen, the chief executive of consultancy China Corn Net. "Historically, bumper harvests come after big floods. Corn is special and waterlogging is not a big concern (during the early stages of planting). There was a reduction in output because of drought last year so there will certainly be an increase after flooding-but we will have to wait until a month after the floods are over before making any definite judgement," he said.

According to analysts, China is expected to import 1.7 million tonnes of corn over the 2009-2010 marketing year, with domestic yields set to decline 12% to 136 million tonnes. Beijing had originally predicted a total yield of 163 million tonnes for the 2009-2010 planting season.

China's southern, southwest and central regions bore the brunt of two powerful typhoons last week, which wreaked havoc in as many as 28 provinces and damaged 7.6 million hectares of farmland, stated a news agency. But China's problems are not confined to the typhoon-hit south. According to the China National Grains and Oils Information Center, since the beginning of July, the heaviest daily downpours since 1951 have drenched the northeast, damaging 1.19 million hectares of farmland and forcing thousands of farmers to delay bringing their crops to the market for another month.