October 6, 2011

China will not have enough supplies to meet rising domestic demand even as farmers harvest a record crop, the US Grains Council (USGC) said after completing a 15th annual field tour.

Consumption may total 170.1 million tonnes (6.7 billion bushels) in the year that started October 1, said Thomas C. Dorr, the council's president and chief executive officer. That would be the most ever and outpace domestic production, he added.

Farmers may produce 166.6 million tonnes this year, up 5.6% from last season, said Kevin Rempp, a member of the council's Asian advisory team and an Iowa corn farmer. "China will still need to import corn," he said.

Prices in Chicago has jumped 27% in the past year as adverse weather threatened Midwest crops amid rising demand from the US, the biggest grower, consumer and exporter. China, the second-largest producer, may need to import 5-10 million tonnes from global suppliers before the end of 2012 to replenish depleted inventories, Dorr said.

Farmers will harvest an average of 85.9 bushels of corn per acre from an estimated 76.35 million acres this year, up from an average yield of 84.7 bushels from 73.82 million acres, Rempp said after sampling fields with US and Chinese grain traders, government officials and other council members from September 12 to 30.

The USDA forecast China's corn production at 178 million tonnes this season, up 2.9% from a year earlier, and pegged consumption 6.1% higher at 182.5 million tonnes. Imports will climb 54% to two million tonnes, the USDA said on September 12. The department will update its global crop outlook on October 12.