Chinese Corn Imports Forecast to Soar
February 7th, 2011Via: Financial Times:
Corn prices – and with them, the price of meat – are set to explode if the latest import estimates from China are correct.
Last year, Beijing recorded its largest imports of corn since its disastrous crop of 1995-96. But this year could see further record buying. The US Grain Council, the industry body, said late on Thursday that it has received information pointing to Chinese imports as high as 9m tonnes in 2011-12, up from 1.3m in 2010-11.
If true, it means that the corn market is a lot tighter than even the most bullish traders imagine. The US Department of Agriculture, which compiles benchmark estimates of supply, demand and stocks, forecast Chinese imports at just 1m tonnes in 2011-12.
The most China has imported in modern history is 4.3m tonnes in 1994-95 and 3m tonnes in 1978-79. For most of the past 50 years, Beijing has been largely absent from the international market, as domestic production was enough to meet demand.
But Terry Vinduska, the chairman of the council, said after visiting China that “estimates given to us were that China is short of 10m-15m tonnes in stocks and will need to purchase corn this year”. He pointed to about 9m tonnes in imports. “We learned the government normally keeps stocks at 30 per cent but they are currently a little over 5 per cent, which may lead to imports of 3m-9m tonnes.”
Related: Largest Soybean Sale Ever Between U.S. and China
