April 9, 2024

 

China anticipates record corn crop in 2024, potentially reducing US imports

China is on track to achieve a record-large corn harvest in 2024, surpassing the previous year's record, despite government initiatives aimed at shifting focus towards soybean cultivation at the expense of corn, Reuters reported.

 

This anticipated surge in corn production could further decrease China's reliance on US corn exports, particularly with the possibility of increased corn production in Brazil, another key corn supplier to China.

 

According to the US Department of Agriculture's (USDA) Beijing attache, Chinese corn output for the 2024-25 season is forecasted to rise by 2.4% to a record 296 million metric tonnes, driven by improved yields and expanded plantings. This would mark the fourth consecutive year of record corn production in China.

 

Ensuring food security remains a top priority for China, prompting efforts to reduce dependency on imports. While soybeans currently dominate China's imported agricultural commodities, with corn imports accounting for only 8% of domestic consumption, the government has introduced increased subsidies for soybean production compared to corn for the 2024-25 season.

 

Despite these incentives, Chinese farmers still expect higher returns from corn cultivation, especially with recent yield improvements and the potential for further growth facilitated by genetically engineered (GE) seeds, which have only recently been introduced. Although USDA estimates that only a small portion of China's corn area will be under GE seeds for the 2024-25 season, this figure could potentially increase significantly in the coming years.

 

It remains uncertain whether China's expanding corn production will lead to a reduction in imports, which have remained strong in recent years despite bumper crops. USDA's attache projects Chinese corn imports for 2024-25 at 20 million tonnes, down from 23 million tonnes in the current year.

 

Meanwhile, Brazil has emerged as China's primary corn supplier since early 2023, displacing US exports. USDA's Brasilia attache forecasts a 6% increase in Brazilian corn production for the 2024-25 season, although a smaller crop for the current year could keep Brazilian corn prices elevated and favour competing exporters.

 

Lower US corn prices, particularly when Brazilian supply is limited, could present opportunities for US exporters to penetrate the Chinese market and other markets. Despite a surge in US corn exports in February, shipments to China remain minimal, with only a few cargoes dispatched last month.

 

The recent decline in Brazilian corn exports could potentially benefit US exporters, with Brazil reporting significantly lighter corn exports in March compared to the previous year, with only a fraction destined for China.

 

-      Reuters