September 26, 2011

China has room for corn imports despite self-sufficiency goal

China could allow for eight million tonnes of corn imports even if the government sets a self-sufficiency rate of 95%, the US Grains Council said Friday (Sep 23).

The council is a farm lobby with interests in promoting US exports, but its analysis of China's trade data largely reinforces private-sector assessments that suggest the country may be poised to sharply hike its intake of foreign corn.

The self-sufficiency rate refers to domestic output as a fraction of total consumption.

The council projected that China could absorb as much as 16 million tonnes of corn imports if it lowers its self-sufficiency rate to 90%.

The country maintains a goal of self-sufficiency for grains, which include wheat, corn and rice. "There is occasional talk in China about what level of self-sufficiency they can accept, and 95% is often mentioned, along with the idea that maybe they can settle for 90%," the council noted.

However, sharply higher demand in recent years for meat and eggs has strained the country's corn inventories, and China turned net corn importer last year for the first time in 15 years.

China imported 1.57 million tonnes of corn last year, and has imported 452,799 tonnes in the first eight months this year. Analysts said another two million tonnes may have been booked for shipment after October.

The country limits annual corn imports to 7.2 million tonnes to protect what it perceives to be a strategic need to feed its population using domestic resources.

China lost its 95% self-sufficiency rate in soy in 1995, a trend accelerated by its accession to the World Trade Organisation in 2000.