November 9, 2007

China's corn output less one million tonnes than expected

China National Grain and Oils Information announced that China's corn harvest this year is one million tonnes less than last month's forecast.

This low production was attributed to droughts in spring and summer which gravely affected the northeastern provinces, the top regions for grain production in China. However, analysts say that US corn imports are not yet being considered since domestic supplies are still a lot cheaper.

Corn from the US costs US$ 269 a tonne on arrival while the domestic corn costs US$229 a tonne. China will issue 7.2 million tonnes of import quotas next year, the government said.

Domestic corn prices are not expected to rise since feed producers have wheat or rice as substitutes, said Guo Huiyong, an analyst from Beijing Orient Agriculture Consultant Ltd.

Corn plantings have risen 4 percent this year, according to the Grain and Oils Information Centre.