October 20, 2003

 

 

An Overview of China's Corn Market from January to September 2003

 

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Append here are abstracts of key areas discussed in this report.

 

2003: Reduced Corn Planting Areas and Heavy Rainfall Caused Corn Output in China to Drop

 

The reportedly total corn planting areas in China this year is 360 million mu, or 23.97 million hectares, ("mu" is a Chinese measurement unit of area; 1 mu = 0.0667 hectares) indicating a decrease of 2.7% versus last year's total planting areas. Planting areas in major corn- producing provinces are all reduced, except Jilin and Inner Mongolia where planting areas increased 3.6% and 6.7% respectively.

 

China's Corn Export Seen Robust; No Large Imported Volume Expected    

 

Market analysts are forecasting that China's corn is expected to maintain its advantageous export status, and the total annual exports this year are likely to exceed 11 million tons. On the other hand, the imports of corn into China between January and August this year were insignificant, totaling a mere 4 ton for the period, which was a drop of 99.9% versus the same period last year. This was mainly attributable to the price disadvantage of imported corn.

 

China Domestic Corn Stockpiles Decreasing Continually; Stockpiles Located Mainly In Northeastern Region

 

The forecast supply volume of domestic corn for marketing year 2002/2003 is seen to fall by 4.0% compared to last marketing period, while total domestic consumption is likely to maintain at last year's level. Of the total domestic consumption, growth for feed consumption would be 1.0%; a fall of 8.8% for human consumption; and growth of 5.5% for other industry use.

 

Global Corn Output And Demand Seen Increasing; Global Stockpiles Seen Decreasing

 

Global corn consumption for year 2002/03 was 633 million tons, which was an increase of 1.9% versus the previous period. Of these, feed consumption accounted for 68.5% of the total consumption. As consumption exceeded output, forecast for the stockpiles at the end of the session is 97.92 million tons, which is a drop of 24.3% versus the previous period. Of these, stockpiles in the US and China would fell by 36.8% and 31.1% respectively.

 

China's Corn Prices Between January and September Rose Slightly Amidst Market Stability; Corn Prices In Foreign Markets Once Near Bottom But Now Rebounded         

 

In the third quarter, livestock industry in China regained its vitality after the SARS outbreak was put under control. During this period, demand for corn started to rise and market transactions increased significantly. Accordingly, corn prices went up in an active market situation. In particular, prices moved up significantly in mid September, as heavy rainfall affected corn output and demand was seen on an upward trend.