China corn imports may surge 50 times: US report By CLAIRE LEOW in Jakarta
March 9 2006
CHINA may import 50 times more corn next year than in 2006, as rising incomes enable more consumers to afford meat, pushing up demand for chicken and hog feed made from grain, including corn, a US report said. China may import 1 million tonnes of the grain in theyear ending September 30 2007, from an estimated 20,000 tonnes this year, a US Department of Agriculture said in a report dated March 1.
A surge in Chinese imports may benefit growers in the US, the world's biggest corn producer, and extend gains in global prices of the grain. Corn futures have risen about 9 per cent in the past year to US$2.32 (US$1 = RM3.72) a bushel on the Chicago Board of Trade.
China's economic growth has boosted per capita disposable income in the country's urban areas, increasing consumption of meat and diary products.
Corn stockpiles in China, the world's second biggest grower of the grain, will drop to 35.5 million tonnes next year from 39.5 million this year as consumption outpaces production, the report by Kevin Latner and Jiang Junyang in Beijing said.
To meet rising demand, China's corn area will reach a record 26.2 million hectares this year ending September 30, lifting output 3 per cent to 134 million tonnes, the report said.
Jochen Hitzfeld, a Munich-based analyst at HVB Group, a unit of Uni Credito Italiano SpA, forecast a bigger drop in Chinese corn stockpiles, on a calendar year basis.
"Assuming a still good harvest of 128 million tonnes, China will already reach the critical minimum reserve of 9 per cent of domestic consumption in 2006," with stockpiles estimated to drop to 12.3 million tonnes, less than half of last year's 26.3 million tonnes, he wrote in a February 27 report. Stockpiles would be little changed at 12.5 million tonnes in 2007, he said.
China may import 12 million tonnes of corn in 2007 for its needs and to build up its corn stockpile for food security, he estimated.
Such a volume would represent "17 per cent of the global volume of corn available for export and trigger a sharp increase in prices", he wrote.
"Furthermore, the world's largest exporter, the US, plans to process part of the surpluses to ethanol to reduce its dependence on petroleum imports from the Middle East (West Asia)."
US production of ethanol will rise by more than a third in the marketing year that begins September 1, boosting US corn use to a record 11.5 billion bushels compared with production of 11.1 billion bushels last year, the Renewable Fuels Association in Washington said on February 17.
South Korea and Japan are the largest importers of Chinese corn, the report said.
The US is the biggest exporter of corn, which is usedmostly to make animal feed, fuel and sweeteners. The 2005 crop was the second largest ever. - Bloomberg
