China downplays talk of mounting corn imports

by Agrimoney.com

China's influential CNGOIC think tank downplayed forecasts of a huge rise in the country's corn imports, flagging the potential for domestic output, but acknowledged the prospect of more soybean purchases.

Wang Xiaohui, director of the market monitoring department at the state-run bureau, highlighted the pressure on the country to raise its corn supplies, in the face of rapidly-growing demand, from industrial as well as feed users.

"Higher income [for consumers] means more consumption of food," Mr Wang said, told the International Grains Council conference, pegging China's feed use alone at 131.0m tonnes in 2013-14, and industrial use at 19.0m tonnes.

However, with the domestic harvest expected at 214.0m tonnes, imports would be constrained to 5.0m tonnes next season, if a figure nearly double the 2.7% brought in during 2012-13.

The USDA foresees China importing 7.0m tonnes in 2013-14.

Demand vs supply

And further ahead, Mr Wang said that while "strong industrial demand and livestock feeding" will further raise demand, domestic production will increase too to meet most of the extra demand.

"Corn area is expected to rise slightly above current levels over the next 10 years," he said, with improved agricultural techniques improving yields too, even assuming China maintains curbs on growing genetically modified varieties.

"China will still need to import 10m tonnes to make up the difference," he said, a figure well below the 19.6m tonnes that the USDA foresees for 2022-23.

However, it concurs more closely with a forecast last week from the OECD and UN Food and Agriculture Organization that China's imports of coarse grains overall, including the likes of barley and sorghum, will reach 13.2m tonnes in 2022.

China's prospects for corn imports are closely watched by markets given the country's change from self-sufficiency to being a structural importer and, given the size of its needs, the potential for huge purchases if the domestic harvest falls short.

Soybean outlook

China's soybean import prospects are also keenly monitored by investors, given the country's status as the top buyer.

Mr Wang forecast that China's domestic soybean production will remain constrained by plantings which are "projected to decrease" longer-term, squeezed by the country's land constraints.

With consumption by feed groups rising by some 3% a year, "more soybeans will need to be imported", he said.

However, Mr Wang stopped short of making a forecast for China's import needs.

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