by Commodity Online
China, the world’s second-biggest consumer of corn, is all set to expand planting this year as the industrial use of corn is increasing rapidly and farmers seek to profit from strengthening prices.
China’s demand for corn is expected to grow faster than supply over the next 10 years. A dramatic increase in the industrial use of corn to produce ethanol would require increased output of the grain and will lead to higher prices.
Bloomberg has reported that China is limiting corn use by the biochemical and sweetener industry to ensure sufficient supplies for livestock feed. On the other hand, processors are barred from buying more corn than they consumed in 2009 since most of the large processors anticipated government policies and bought supplies quite early the industrial use of corn is not expected to drop significantly.
According to National Grain and Oil Information Center, total domestic corn consumption in China has been growing at 2.4 percent annually surpassing the 1.7 percent annual growth in production--trends that have sharply effected its stocks of corn.
The surging industrial demand have caused corn prices to rise sharply since the latter half of last year.
According to the official data, China's total corn consumption was over 180 million tons in 2010, increasing by over 5% over 2009. With the recovery of Chinese economy, the demand of China's feed and processing industry for corn will see a sharp increase in 2011-2012.
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