March 3, 2011

 

China to plant more corn over soy in 2011

 

China's farmers are likely to allocate more acreage to corn than any other crop this spring to benefit from historic high prices, according to a plantings report due later this month.

 

Record Chinese corn prices , coupled with Beijing's policy incentives to encourage grain production, will motivate farmers to grow more corn in 2011, while planting less soy, grain officials said.

 

"Judging by an increase in wheat acreage of more than one million mu (66,600 hectares), corn acreage will definitely increase by a similar amount because of better returns from growing grains," analysts said.

 

If there are no major weather disasters this year, that could lead China, the world's No. 2 corn consumer, to harvest at least the same amount of corn as last year - or a record 172.5 million tonnes, according to the China National Grain and Oils Information Centre. Farmers planted 32.5 million hectares of corn in 2010.

 

Corn and soy are competing for land in China's northeastern provinces, which produce about 40% of the country's total corn and 60% of soy.

 

China's agriculture ministry will publish the planting intentions of a sample of farmers later this month.

 

"Returns from growing corn are better than soy, which has higher input costs," said an official with the Agricultural Bureau in Heilongjiang province, adding that widespread use of machinery in corn production had helped farmers save labour costs and intensive planting had boosted corn yields.

 

Corn acreage has expanded by more than one million hectares since 2004 as farmers shifted away from soy. Beijing's policy incentives aimed at ensuring food security have also encouraged local authorities to boost grain production.

 

China, the world's largest soy importer, has consistently increased soy imports over past years to match the rapid expansion of its crushing industry. China's soy imports rose 29% in 2010 to a record 54.7 million tonnes, accounting for more than half of worldwide soy trade.

 

Corn is also competing for land with cotton in northern China, although in some areas, farmers plant alternating rows of corn and cotton or wheat.