China’s corn imports surged nearly seven times in September from a year earlier to a four-and-a-half-year high. Hong Kong’s English-language South China Morning Post reported Wednesday (Oct. 28) that China’s corn imports surged to 1.08 million tons last month, 675 percent higher than a year earlier and accelerating from a 339 percent increase in August, based on import data released by China’s General Administration of Customs (GAC).
Corn imports in September reached their highest level since April 2016, when the Chinese government stopped buying corn for its national reserves at a fixed low price, tightening a once oversupplied domestic market.
Imports from the U.S. grew even faster, up 1,244 percent year-over-year, while imports from Russia and Ukraine also rose sharply, statistics show. China even purchased 13,973 tons of corn from neighboring Laos.
China’s surge in corn imports from the United States has raised concerns. Many feared that geopolitical tensions and a coronavirus pandemic might affect China’s grain imports. But the actual numbers show that the staged trade agreement between the world’s two largest economies is holding up.
According to a joint statement issued by the Office of the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA) on Oct. 23, China has purchased more than $23 billion in U.S. agricultural products so far this year, 71 percent of the purchase goal set under the trade agreement.
One of the factors contributing to the rapid increase in China’s corn imports was the typhoon and torrential rains that hit much of China, especially northeast China’s corn-producing regions, in September, which significantly strengthened market expectations for a reduction in grain production in the region. The market is expecting a reduction in corn production in the northeast in the range of 3-10 million tons.
Reduced grain production drives up prices. Grain quotes in the northeast compared to last year’s corn rose as high as 400 yuan per ton, equivalent to an increase of 20 cents per pound. Soybeans rose as high as 1,300 yuan per ton, equivalent to a 65-cent increase per pound. Corn and soybeans are the main hog feed in China.
The U.S. Department of Agriculture forecasts a corn supply shortfall of 27 million tons in China for the marketing year beginning this month. The USDA said in early October that China may rely on corn imports and stocks of aged rice and wheat to meet feed needs for the upcoming marketing year.”
The South China Morning Post quoted a corn analyst at a Chinese futures company in Harbin as saying, “We forecast that domestic corn prices will continue to rise in the medium to long term because of the gap between domestic supply and demand.”
Recent Comments