Historic revision reinforces concerns that the country’s import needs have been vastly overestimated
The U.N. Food and Agriculture Organization (FAO) has increased its Chinese corn stocks estimate for the 2014-15 crop year by a historic 15 percent, to 95.4 million tons, reinforcing concerns that the country’s import needs may have been vastly overestimated.
FAO’s new forecast will hurt leading exporters, such as the U.S., and agricultural traders.
The revision comes after a sharp downward revision in January by the U.S. Department of Agriculture (USDA), which cut its medium-term predictions for Chinese corn imports, according to a Financial Times report. The USDA’s 2014 long-term import forecast for China of 22 million tons for 2023-24 has been reduced to 6.5 million tons.
A senior economist at the FAO said there are some worries that the revised numbers were still underestimating China’s stocks levels.
FAO said it had reduced its estimates of corn used for feed for 2004-09, shifting the extra supply to inventories. As a result, inventory numbers for the past 10 years have been revised. The estimate for 2014-15 has been increased from 82.7 million tons to 95.4 million tons, which is higher than the USDA’s 79.2 million tons and the International Grain Council’s 85.7 million tons.
FAO’s increase in stock numbers coincides with bumper crops in 2012 and 2013 and an abrupt drop in consumption in recent years.