Demand up, imports likely to increase
An August typhoon that damaged fields in northeast China has resulted in lower estimates for the country’s corn harvest, according to reports, dropping them to 171 million metric tons.
That number is still a 2.2 increase from 2011’s 167 million metric tons, though down from the U.S. Department of Agriculture‘s 3.7 percent estimate of 200 million metric tons. “Corn supply and demand in China will continue to tighten” even with the increase in output, said Li Qiang, chairman of Shanghai JC Intelligence Co. Rising domestic demand and a gain in South American supplies may narrow the price gap between local and global markets in 2013, making imports more likely, said Qiang.
Corn imported from the U.S. would cost 2,682 yuan ($424) per metric ton, compared with 2,555 yuan for domestic supplies as of September 28, according to Shanghai JC. A smaller harvest may prompt the Chinese government to sell stockpiles of corn and feed wheat, boosting the need for imports to replenish inventories. “Consumption is increasing: there’s no doubt about it,” said Bryan Lohmar, the China country director for the U.S. Grains Council. The amount of imports will depend on prices, so “if international prices go down, there will be demand for corn” from China to build inventories, he said.