China corn demand up in spite of high prices

Asian countries may sustain demand as economy slows

Corn shipments to China grew 36 percent in July to reach a six-month high, and imports in the first 10 months of the 2011–2012 marketing year totaled 4.2 million tons compared with a record 4.3 million tons in the whole of 1995–1996, according to data. These numbers come in spite of high corn prices and a 13 percent drop in U.S. production.

“The (U.S.) corn yield is likely to be below what the [U.S. Department of Agriculture] is currently forecasting,” said Bill Barbour, an investment specialist for the DWS Global Agribusiness fund. “There’s a risk that some of the supply-chain managers may not actually be able to deliver grains to their customers.” But demand from China remains strong, and Asian countries in general may be the ones to sustain demand for food while costs increase and economic growth slows, said Barbour.

Corn prices hit a record $8.49 per bushel on August 10.