October 31, 2011

The International Grains Council revised up on Friday (Oct 28) China's 2011 corn import estimate starting July 1 by 33% to four million tonnes.

This will make the country the six-largest importer by volume. It said China's imports will more than double from last year's 1.7 million tonnes. A recent price decline has triggered some additional purchases by China.

Despite China's official reports that a record crop is currently being harvested, underlying feed and industrial demand is strong, availabilities appear tight and local prices remain close to all-time highs, particularly when internal transportation costs to southern parts of the country are taken into account, IGC said.

China, which in theory aims for self-sufficiency in grains, started to import large quantities of US corn last year and its purchases is one of the reasons for prices hitting a record high in June.

IGC also revised up Ukraine's corn exports forecast by 4.7% to nine million tonnes. Ukraine exported five million tonnes of corn in 2010-11. It revised up Ukraine's corn output projections by two million tonnes to 18 million tonnes, 57% higher.

A sharp rise in output and costlier, limited supply from the US, the top exporter, has prompted even East Asian buyers to turn to Ukraine to cover requirements, a rare development.

IGC revised up Australia's wheat output projections for 2011-12 by 2.7% to 26.2 million tonnes and its export forecast by 7% to 18.5 million tonnes.

It said Australia was saddled with multi-year high stocks of 8.6 million tonnes on October 1 and stocks will be little changed a year later despite strong exports.

China's wheat imports will likely hit 1.5 million tonnes, up 50% from an earlier forecast of one million tonnes, IGC said.