August 23, 2011

China delegates study South African corn for imports

Authorities from China went to South Africa to examine the possibility of buying corn from that country, which is considered as the biggest producer of the grain in the continent.

The officials arrived last month to analyse the risk of pests before considering imports "in the near future," Barrett Schoeman, an economist at Bothaville, South Africa-based Grain SA, the country's farming body, said.

China, the world's second-largest corn producer, may need to import two million tonnes of yellow corn in the 2011-12 marketing season to meet rising demand, Schoeman said.

A surplus that depressed South African prices to four-year lows last year has pushed farmers to seek new export markets. The government tried and failed last year to spur exports to China, Egypt and Tunisia, South African Agriculture Minister Tina Joemat-Petterson said in November. Grain SA is studying Venezuela as a possible export market, Schoeman said.

South Africa may export a total of two million tonnes of white and yellow corn this season, Schoeman said. That's unchanged from the 2.07 million tonnes sold last season through April 29, even as South Africa reaped 12.82 million tonnes, the most since 1982. Buyers included Japan, Spain, Italy, Taiwan and Somalia.

The country produces mainly white corn, used mostly for human consumption. Its exports of yellow-corn almost quadrupled to 1.02 million tonnes, the highest level in 14 years.

China's corn imports may grow to more than 10 million tonnes annually in five years as demand rises faster than output, said Zheng Wenhui, a researcher at South China Grain Trade Center. Consumers are switching to diets rich in meat, poultry, eggs and dairy, boosting demand for grain to feed livestock, Zheng said.

White corn for delivery in December closed at ZAR2,200 (US$305.77) a tonne on the South Africa Futures Exchange in Johannesburg today, after more than doubling from last year's low of ZAR996/tonne (US$138.73). Yellow corn for delivery in September sold for ZAR2,168/tonne (US$301.97), up 62% in the past 12 months.