December 31, 2010

China sees rising corn demand in 2011

With the growth of large-scale hog farms and higher pressure for more feedmeal, corn demand from China's downstream processing industry will likely increase in 2011, said Deputy Agriculture Minister Wei Chaoan.

Wei's comments highlight China's pressing need for corn imports, which has not abated despite a robust harvest boost this winter, in a year when the country broke a 15-year run of self-sufficiency to import more than 1.5 million tonnes of US corn.

Feedmeal demand is expected to rise by about 4.5 million tonnes in 2011, which will likely prompt the expansion of China's corn processing industry, he said in a statement.

"The rise of large-scale hog farming and increased purchases of meat have raised the demand for feedmeal, necessitating even more corn and soymeal," Wei said in a speech published on the ministry's website.

The corn processing industry in 2010 is estimated to have produced about 60 million tonnes, but demand is likely to exceed 70 million tonnes in 2011, Wei said.

"The corn processing industry will account for more than a third of corn demand, exceeding China's target of 26%," he added. The feedmeal and corn processing industries account for more than 90% of corn demand.

China posted a record grain harvest this year, including a 5% rise in corn production, the ministry of agriculture told reporters earlier this month.

However, the demand from feedmeal and processing industries highlighted by Wei are likely to strain the country's ambitions of self-sufficiency and keep corn imports flowing next year.

The US became China's largest corn supplier this year, after China turned net importer in June.