October 10, 2013

China's 2013 corn harvest to hit record high

Despite drought and flooding in the country's major breadbaskets, China's corn production could hit a record high of 215 million tonnes in 2013, 7 million tonnes more than 2012, according to the State Administration of Grain (SAG) and China National Association of Grain Sector (CAGS).

The harvest comes after severe drought in the south and flooding in the northeast. Some of the worst floods in decades left at least 85 dead in Heilongjiang, Jilin and Liaoning provinces, causing crop failure and losses of billions of yuan.

Drought hit several southern provinces this summer, bringing serious shortages of drinking water for millions and the destruction of large areas of cropland. The bumper harvest means rising corn stocks at a time when demand is slack, agricultural experts say.

"We predict corn consumption will be 197.5 million tonnes in the year from 2013 to 2014, about 14 million tonnes below output," said Liu Xiaoran, deputy secretary-general of CAGS's corn branch.

"The corn supply exceeds demand as both stocks and imports are high, while the weak economy has also affected the demand for corn for processing," said Li Tong, an analyst with Zhengzhou Grain Wholesale Market in central China's Henan Province.

According to figures from the General Administration of Customs, China imported 1.75 million tonnes corn in 2011 and 5.2 million tonnes in 2012.

Liu said the pressure from excessive supply and rising imports would further lower the corn prices in the domestic market. Spot price for corn in Chinese market is currently standing at RMB2,400 (US$392) per tonne.