China's Corn Imports May Hit 9.3M Tonnes This Year
By David Harman 23 Mar 2007 at 10:12 AM GMT-04:00
SHANGHAI (Interfax-China) -- China may become a net corn importer of 9.3 million tonnes this year amid growing domestic demand, according to the National Grain and Oil Information Center (NGOIC), a cereal market information provider for policy makers.
China's demand for corn might hit 155.3 million metric tonnes this year, while output is estimated to reach 146 million metric tonnes, according to NGOIC forecasts.
"Currently, we expect the futures market to remain weak, but might pick up later in the year following the recovery in domestic demand," said analyst Qian Yanjie, at CIFCO.
Domestic demand will come mainly from the deep processing sector. Though current demand remains sluggish, it is expected to pick up later in the year and may reach 50 million metric tonnes in 2007, up 25% from the previous year.
Production capacity will reach between 57 million and 62 million tonnes this year.
Demand from the livestock feed industry is also estimated to rise after May, and may reach 95.5 million to 96 million metric tonnes for the year.
Food consumption of corn might also increase this year to 7.8-8 million metric tonnes, up from last year's 7.6 million tonnes.
Seed consumption may rise 8% to 12% to about 2.1 million metric tonnes this year on the back of better financial expectations.
China's corn exports in the first two months this year reached 1.77 million metric tonnes, up 24.6% from the previous year. However, the export contracts were signed last year, and no new contracts have been signed this year.
Last year, China imported a total of 70,000 metric tonnes of corn while exports were 3.1 million metric tonnes, down 64.1% from the previous year.
Corn futures on CBOT closed yesterday at 409 ¼ cents per bushel. The contract hit a high of 450 cents in late February and has risen nearly 80% since early September 2006. (See RI’s most recent coverage of the grains.)
Commentary
There appears to be a lot of 'might & maybe' qualifiers in these predictions. That said, the trend is definitely set for China to become a net importer, whether this year or next. We are expecting a tight supply/demand situation this year and it really would not surprise if a shortfall arose sooner rather than later.
This article comes from Interfax China Commodities Daily, a daily digest produced by Interfax News Agency in Mainland China. To receive 10 free copies of this, please e-mail [email protected].
