Import Margins Balloon in China

Corn in China
This week’s U.S. Grains Council Chart of the Week illustrates that despite declining corn prices in the United States, corn prices in China continue to rise.

This week’s U.S. Grains Council Chart of the Week illustrates that despite declining corn prices in the United States, corn prices in China continue to rise. Following years of increasing corn production, China has an abundant supply of corn available. However, transportation costs from production areas to areas that use corn make corn in China more expensive than corn imported from the United States. According to the chart, corn in China is selling corn at almost $155 more per ton than corn imported from the United States would cost.

“Does China have a lot of corn? Yes. Is it expensive? Absolutely,” said Kevin Roepke, USGC director of trade development in China. “If China end-users could import corn there is a significant cost savings they could experience.”

However, importing corn in China is difficult, as the major corn exporting countries are unable to enter the market. The Ministry of Agriculture in China has failed to approve Syngenta’s MIR-162 trait, which has made importers in China reluctant to purchase corn from the United States, Brazil or Argentina, as the trait is found in all three countries. Ukraine is off-limits to private importers in China, as all trade between the two countries must be done on a government level.

USGC members can listen to USGC Director in China Bryan Lohmar present his thoughts on the matter by attending the Council’s 54th Annual Board of Delegates Meeting, in Omaha, Nebraska, on July 28-30, 2014. Register today!