December 13, 2006

China's rising corn demand would force it to import

China will become a net importer of corn within the next few years, according to an official at the Chinese ministry of commerce.

The ministry said purchases of maize to use in feeds, biofuels and other industrial processes has surpassed production nationally. China's corn stocks have already fallen this year as a result of the domestic demand, the ministry said.

China's switch from net exporter to net importer is long expected. Although it exported 8.61 million tonnes of maize in 2005, exports in the first nine months of 2006 were down by more than 68 percent at only 2.3 million tonnes.

Initially there had been estimates that as much as 5 million tonnes of Chinese corn could reach world markets in the second half of the year.

On the other hand, imported maize reached a new record at 60,000 tonnes.

Beijing had insisted that China would not change from an exporter to importer as early as 2007 as supplies still exceed demand. However, they do concede that the surplus will shrink as more enterprises use corn for animal feed and ethanol production.  

China's corn consumption was just 13.8 million tonnes in 2004. It rose to 25 million tonnes in 2005 and it already reached 15.6 million tonnes by the first half of 2006.

China is now the third-largest fuel ethanol producer after Brazil and the USA.