USGC Projects China Bumper Crop: Corn Imports Expected to Continue to Meet Surging Demand
- Published on Tuesday, 04 October 2011 16:34
“As a farmer, I’m always happy to see strong harvests, and today’s figures are good news,” said Dr. Wendell Shauman, USGC chairman. “Demand for high quality protein continues to grow, thanks to the surging growth of the global middle class. As a result, world corn prices this summer and fall reached record highs. Strong harvests will help moderate prices and keep our international growth markets on track. In the long run, that’s good for both producers and consumers all around the world.”
The Council has conducted an annual China Corn Harvest Tour since 1996, at a time when it was the only independent, non-governmental crop information collected on China. The Tour consists of detailed field surveys in China’s major corn production regions conducted by teams of highly experienced private sector analysts with long experience in the China grain market.
Over the past seven years, the cumulative difference between the Council’s crop production estimate and the official Chinese government estimate is approximately 97 million tons (3.8 billion bushels). Private sector analysts generally believe China’s corn reserves, figures for which are not officially released, have been drawn down during this period. In addition, domestic corn prices are high, and in the last two years China has reemerged as a major corn importer.
“All around, government, private analysts and the Council say this is a good crop. However, the Council’s estimate indicates China’s production will be insufficient to meet anticipated domestic demand. In addition, China has drawn down its stocks below its comfort level, which is roughly 25 percent. The Council believes the 2011 production will provide for 14-16 percent ending stocks. Therefore, China will need to import to fully satisfy domestic demand and rebuild those stocks,” said Don Hutchens, Nebraska Corn Board executive director who participated in the Tour.
“With the fastest-growing middle class in the world, China has a great opportunity to enhance its food security through trade. That translates into a growing opportunity for U.S. producers over the next several years,” said Shauman.
As recently as 2002/2003, China exported nearly 600 million bushels of corn. Exports then began to decline, and China was a net importer in 2009/2010 and 2010/2011. Projections for China’s corn imports in 2011/2012 vary widely, from 2 million tons or 78.7 million bushels (USDA) to more than 10 million tons or 393.7 million bushels (private estimates).