China to Buy More Corn Starting This Year

Posted Jul 26th 2010 9:30AM by Connie Madon
Filed under: International Markets, Forecasts, China, Economic Data, Commodities

Shanghai JC Intelligence Co's chairman Hanver Li said that China plans to import 1.7 million tons of corn this year and 5.8 million tons next year. The buying will continue to increase to up to 10 million tons by 2015. China's previous largest import of corn was in 1996, when it bought 4.29 million tons.

This is a major policy shift for China. Li calls it a "new era" of corn buying. Incomes in China have been rising. Demand for more meat, milk and eggs is growing. Corn is a major feed supply for cattle, as well as a food staple.

The logical place for China to turn to for its corn purchasing would be the U.S. We have an oversupply this year. Exports to China will help stabilize prices, not only for this year, but for the next five years.

Currently, about 20% of the U.S. corn crop goes into the production of ethanol. If we combine China's buying and the growing need to use corn for ethanol, we can look for higher prices. So far, corn has rallied 8.4% since April 27 when the United States Department of Agriculture (USDA) announced China's first purchases.

Would you speculate on higher prices for corn?

Tags: corn, inthenews

Print this

Reader Comments (Page 1 of 1)

7-26-2010 @ 11:07AM

Prodancer01 said...

Higher price for US corn is what the US farmer needs.

7-26-2010 @ 8:56PM

william lindblad said...

Doubtful. One thing missing is the blog is that China GROWS A LOT OF CORN. As an Ag. product, corn is also versatile in the sense that it also produces CORN OIL and it is also a soil beneficial, like beans. The only reason that China would have a great interest would more likely be the same as the uses that are here. More exports would certainly have an impact on price - but I doubt that it would be significant. One has to keep in mind that it is an easier ag. product than rice, but it does have it's drawbacks in the sense that it is a heavy feeder (requires fertilizer) and does not do well in certain weather conditions. All in all though, with today's genetic engineering who's to say. I guess one could speculate.
EU does not like the GE crops, but China? There they put ethylene glycol in milk and toothpaste, so who's to know what is next?