December 5, 2011

 

 

China's grain production rose 4.5% this year to a record 571.21 million tonnes, with this eighth consecutive year of growth driven by an 8.2% increase in corn output, the National Bureau of Statistics said Friday (Dec 2).

 

The strong corn output data may help to ease inflationary pressure in China after pork prices escalated this past 12 months - largely due to tight corn supply.

 

China's consumer price index growth has eased in recent months after reaching a three-year high of 6.5% in July. October CPI growth eased to 5.5% after policy makers adopted a number of inflation-fighting measures.

 

The corn output figures may be exaggerated, said an analyst with a grain consultancy, noting that high output figures can ease market worries about supply tightness.

 

Corn output rose to 191.75 million tonnes in 2011, while rice output reached 200.78 million tonnes, up 2.6%, and wheat output increased 2.4% to 117.92 million tonnes, the bureau said.

 

The bureau includes rice, corn, wheat, soy and potatoes in its grains data. It did not provide soy output, for which the state-backed China National Grain & Oil Information Centre (CNGOIC) forecast an 11% decline.

 

The corn figure was much higher than the 184.5 million tonnes estimated by both the USDA and the CNGOIC.

 

The US Grains Council and domestic consultancy Dalian Yigu Information Consulting Co made even more conservative estimates, at 167 million and 171 million tonnes, respectively.

 

Corn prices in China have declined 10%-15% since reaching a record at the end of September, but the government appears to be cautious about stockpiling, which could push prices higher.

 

State stockpiler China National Grain Reserves Corp, or Sinograin, is keeping a low profile in northeastern China, China's main corn-producing area, traders said.

 

Meanwhile, Sinograin has become more active in the global corn market this year, booking most of the imports arranged by Chinese companies for US corn, which is believed to total more than four million tonnes so far. The stockpiler has only confirmed that it bought one million tonnes in March.