September 2, 2010

China's corn imports set to slow

Surging corn imports are only a temporary phenomenon and do not pose a major threat to China's food security, agricultural experts said on Wednesday (Sep 1).

Corn imports saw a 56-fold increase to 282,000 tonnes during the first seven months of this year, according to data from the Ministry of Agriculture.

Playing down fears that further imports will trigger price hikes, the experts said the situation will improve as the autumn harvest is just round the corner.

Corn imports peaked in July, with the nation importing as much as 194,000 tonnes compared with 65,000 tonnes in June. Exports of corn, however, remained relatively stable at 13,000 tonnes in July compared with 9,000 tonnes in June.

Import surges were also seen in other commodities like cotton and wheat. Cotton imports rose by 97.6% to 1.71 million tonnes for the seven-month period, while wheat imports doubled to 1.02 million tonnes.

Propelled by the import surges, China's agricultural trade deficit rose by 61.9% to US$13.05 billion for the seven-month period, the ministry said.

The urbanisation pace has triggered an increase in meat consumption. In tandem with this, the demand for corn has also gone up as it's essentially used as an animal feed in China, according to Rabobank.

Rabobank said China utilised nearly 64% of its corn for animal feed in 2009. The balance was used for industrial and edible purposes. Despite the sharp increase in imports and the trade deficit, analysts said there is no threat to the nation's overall food security.