China, the second-biggest user of corn, may increase imports more than three-fold in 2010-2011 to meet demand and help cool prices, according to estimates from Li Qiang, managing director at Shanghai JC Intelligence Co.
The country may buy 4 million to 5 million metric tons, Li said in an interview at a conference in Tianjin today. Accumulated U.S. exports to China were 1.16 million tons and outstanding sales 174,000 tons as of Aug. 26 for the year ending Aug. 31, according to U.S. Department of Agriculture data.
China has been buying U.S. corn and selling from state stockpiles to curb prices that have advanced 15 percent in the past year on the Dalian Commodity Exchange. Imports may exceed 10 million tons by 2015, Ding Ling, an analyst at Shanghai JC, told the gathering.
“While China’s production will match demand this year, the government needs to buy from farmers to replenish stockpiles,” Li said in a speech. Output in 2010 may increase by 22.6 million tons to 158 million tons from last year, he said.
Supply will “basically meet demand,” even in years when poor harvests tighten the market, Liu Xiaoyu, general manager of Cofco’s feed division, said. As the country implements a plan to boost grain output, a deficit “may not be the norm,” Liu said.
Liu said it’s not possible for China to treat corn like soybeans, which rely mainly on imports. Niu Yishan from the U.S. Grains Council said in response it was hard 10 years ago for people to imagine soybean imports would exceed 50 million tons.
China’s corn prices will be influenced more by world markets in 2010-2011 as imports become more “regular,” said Feng Jilong, general manager of Jilin Twin Grain Trading Co.
The price for the new harvest will start near the current spot price in Jinzhou, or about 1,990 yuan ($292) per ton, adjusted for quality, Feng said. The procurement price in the main northeast growing areas will be about 1,650 yuan to 1,850 yuan per ton when the harvest starts, according to JC’s Li.
Corn for May delivery advanced 0.3 percent to 2,020 yuan per ton on the Dalian Commodity Exchange today.
© Copyright 2023 Bloomberg News. All rights reserved.