images2.jpg

China acknowledges need for sizeable corn imports


images (2)

China acknowledged what analysts have long proclaimed, that it will make substantial corn imports, to keep its huge hog herd in feed and meet growing demand for pork among its enriched population.

The China National Grain and Oils Information Centre, China’s official crop think tank, pegged the country’s corn imports in 2011-12 at a record 5m tonnes.

While the figure is still lower than estimates from many other observers, with the US Grains Council earlier this month forecasting that China requiresimports of up to 10m tonnes, it represents a change of tack from an insistence by the country that it can broadly meet its own demand.

Weilu Yang, CNGOIC deputy director, told the International Grains Council in June that was it was "improbable" that China would become ever-more dependent on corn imports, flagging the potential for raising yields.

‘Stark changes’

Tuesday’s forecasts "confirm strong demand even if our estimates are 8m-9m tonnes", Agritel, the Paris-based consultancy, said.

At Barclays Capital, analyst Sudakshina Unnikrishnan said Tuesday’s CNGOIC figure was "unusual in being relatively high" for an official Chinese figure. Chinese statistics are often viewed as often inflating production, while understating needs.

The forecast reflects "the stark changes in China’s demand landscape, which are likely to be reflected in higher import reliance going forward", Ms Unnikrishnan added.

Tight dynamics’

Imports of 5m tonnes would propel China to fifth in the world import league, behind Japan, Mexico, South Korea and Egypt.

Biggest corn importers 2011-12, according to current USDA data

1: Japan, 16.1m tonnes

2: Mexico, 9.1m tonnes

3: South Korea, 7.7m tonnes

4: Egypt, 6.0m tonnes

5: Taiwan. 4.4m tonnes

It would represent a sharp increase from levels of 47,000 tonnes three seasons ago, and beat China’s record of 4.3m tonnes of imports set in 1994-95, on US Department of Agriculture data.

The USDA currently estimates China’s corn imports at 2.0m tonnes this season, based on ideas of a 182.0m-tonne harvest and 186.5m-tonne demand, with some run down of inventories to make up the difference.

However, consumption may in fact be far larger, given the needs of feeding a soaring hog population, besides industrial needs, some analysts believe.

FCStone, the US broker, last week said that resilience in Chinese corn futures suggested demand of some 200m tonnes.

Meanwhile, Shanghai-based analysis group JCI Intelligence has pegged China’s corn stocks at roughly half the 50.8m tonnes the USDA believes.

‘Elevated’ purchases

The CNGOIC also forecast wheat imports hitting 1.5m tonnes in 2011-12, a seven-year high on USDA estimates.

The data follow persistent rumours of imports of Australian wheat, which Agrimoney.com reported last week, and Reuters said on Tuesday had amounted to about 500,000 tonnes, of milling grade, for shipment early in 2012.

Trade data on Monday showed China imported nearly 177,000 tonnes of wheat last month, a level termed "elevated" by Ms Unnikrishnan.

Indeed, they came in "at their loftiest level since June, which was the highest level for imports since July 2007", she said.

Corn imports fell 26%, month on month, to 181,100 tonnes.

"But with exports modest at 10,200 and down month on month, China stayed a sizeable net importer, at 171,000 tonnes," Ms Unnikrishnan added.

http://www.agrimoney.com/news/china-acknowledges-need-for-sizeable-corn-imports–3759.html

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>