May 9, 2023

China looks to South Africa to reduce grain reliance on US, Ukraine

China's COFCO Group, the country's largest food processor, manufacturer, and trader, has imported its first shipload of South African feed corn as Beijing looks to friendly nations to lower its grain reliance on the US and war-torn Ukraine, South China Morning Post reported.

The state-owned trader imported 53,000 metric tonnes (1.17 million pounds) of feed corn in the first batch, which will be supplied to domestic firms soon, according to Fan Zhenyu, who is in charge of the company's international corn business.

COFCO has already signed deals with 43 South African farms to be long-term suppliers. The company also runs a large soybean-processing plant in the country.

China is looking to diversify its corn suppliers from more southern world countries and to increase domestic food production to offset global seasonality and rising corn prices caused by geopolitical conflicts.

China's corn self-sufficiency rate is expected to reach 96.6% by 2032, which would reduce its annual imports to 6.85 million tonnes, based on a recent report by the country's Ministry of Agriculture and Rural Affairs.

Last year, China imported 20.6 million tonnes of corn, most of which is used for feeding animals, and the total is equivalent to 7.4% of domestic output. US supplies accounted for 72% of China's imports, according to customs data.

The proportion of US corn fell to 37.8% in the first quarter of this year, but it remained the No. 1 source, followed by Brazil and Ukraine. Chinese buyers cancelled 562,800 tonnes of US corn orders in the last week of April, the US Department of Agriculture warned in a corn-export report released on Thursday.

China is proactively seeking to diversify its corn suppliers from more southern world countries, with the recent expansion of procurement sizes while exploring the use of regular bulk carriers to transport grain.

-      South China Morning Post