China’s feed mills may turn to the U.S. for corn imports due to concerns that the country’s domestic supply might not be able to meet demand before the next harvest, according to researcher Yigu Information Consulting Ltd.
Snow and rain in northern China have left grains susceptible to mold and potentially unsuitable for animal feed, and some mills are locking in U.S imports for later in 2013, taking advantage of lowered corn prices and newly issued permits from the Chinese government. “China’s corn shortage this year may widen to 5 million tons from a previous projection of 2 million tons,” said Feng Lichen, general manager of Yigu. “The crops are just too wet, so as soon as the weather warms up next month, mold will grow.”
China’s purchases could help curb an 18 percent decline in Chicago corn prices from a record in August 2012. The U.S. crop will be an all-time high following the 2012 drought, according to the U.S. Department of Agriculture. Chinese mills bought at least 120,000 metric tons from the U.S. the week of February 18, the first purchases in 2013.