October 28, 2011

 

 

China's corn imports hit a 10-month high of 245,000 tonnes in August, according to data recently released by the General Administration of Customs.

 

Agricultural analysts said the high level of imports may help ease the upward pressure on the price of corn in China's domestic market, alleviating pressure on the government to contain the country's high inflation rate.

 

The analysts also expected more imports of corn in the remaining months of this year, prompted by growing domestic demand and the declining price of corn in the international market.

 

Corn is widely used to feed pigs. Its rising cost in past months has drove up the price of pork. The price of food is an important element of the country's consumer purchase index (CPI), the country's main gauge of inflation.

 

This is mainly being caused by rising demand in the processing industry this year. It uses corn to make starch, ethanol and other products, said Hu Bingchuan, researcher at the Rural Development Institute of the Chinese Academy of Social Sciences.

 

"The corn harvest this year is going to be a bumper one but I don't think the increased yield will match the growth in demand," he said, adding that corn imports this year might set a new record and exceed two million tonnes.

 

According to the Ministry of Agriculture, corn yields this year are expected to reach a record 180 million tonnes, compared with last year's 171 million tonnes.

 

Another industry expert said this year's imports will remain largely unchanged from last year.

 

"China has enough corn stocks to meet domestic demand. The government should tighten its regulations over certain organisations in case there is hoarding and speculation," the expert said.

 

In 2010, China's corn imports hit a historical high of 1.57 million tonnes, representing a staggering increase of 17.6 times on-year, according to the General Administration of Customs.

 

This year, China's grain yield is expected to hit a record high of more than 550 million tonnes, marking the eighth consecutive year for increased production, according to the agriculture ministry.