October 28, 2011
China's corn imports may increase fourfold to four million tonnes in 2011-12, due to increasing demand from feed industry and livestock that cannot be met by domestic production, Morgan Stanley said.
In September and October, China has imported around 1.4 million tonnes of corn from the US, the investment bank said in a recent report, 40% more than the USDA's estimate of one million tonnes for all of China's imports in the US marketing year that ended August 31.
Most of China's corn imports are from the US, though some is also imported from Southeast Asian neighbours.
China, which in theory aims for self-sufficiency in grains, started to import large quantities of US corn last year.
Industrial use of corn has surged to 43 million tonnes in China, accounting for around 20% of projected consumption in 2011 and that compares with around 10 million tonnes a decade ago, Morgan Stanley said, noting that this makes it the second-largest industrial user of the grain after the US.
With a growing livestock population - mostly hogs, reflecting the Chinese preference for pork - and continued consolidation of the livestock industry, demand for corn as animal feed has increased 2.1% over the past decade, it said. Corn as livestock feed accounts for 70% of domestic consumption of the grain.
China's corn production has grown at a slightly slower average annual rate of 2% over the past decade, to 177 million tonnes in 2010-11 and forecast at almost 180 million tonnes this year, Morgan Stanley said.
Area under corn has increased by 2% during the last 10 years, mostly at the expense of soy, it said. While annual soy production has held mostly steady over the past decade at 14-15 million tonnes, increasing demand has pushed up imports.
China's soy imports are forecast at 57 million tonnes this year, up from 52 million tonnes in 2010-11, it said. China is world's largest importer of soy.