China

Supply/Demand Basics

World’s 2nd largest corn producer and consumer.
World’s largest swine, aqua, egg, beer, and distilled sprit producer, 2nd largest poultry meat and corn ethanol producer and growing dairy and beef producer.
World’s largest sorghum importer in recent years; DDGS imports restricted by AD/CVD rules. Corn and sorghum imports gain from Phase One trade deal. Record corn and barley imports in CY 2021

Though slowdown in some sectors, China’s overall economy recovered quickly from the previous year. GDP growth project at 5.3% in 2022 by IMF.
Urban residents consume more animal protein than their rural counterparts. Urbanization is expected to grow from 60% to over 70% in the next 5 years.
Corn feed demand has reduced somehow in recent years due to a relatively high corn prices and other feed substitutes such as feed barley, wheat and rice.
Overall feed demand continues to expand amid China’s economic growth, which is less impacted by COVID-19 as compared with other economies.

China is again the largest importer of U.S. coarse grains (corn & sorghum) in MY 2020/2021 and carries the largest amount of U.S. corn forward contracted for MY 2021/2022.
Imports of U.S. ethanol are subject to a 15 percent (232 tariff) that was not exempted in the Phase One deal, as well as a 30 percent tariff (the WTO bound rate) re-imposed at the end of 2016.
DDGS exports still affected by AD/CV duties, but other constraints are addressed in Phase One deal.
A protocol for U.S. barley imports was completed in 2020; Minimal import was seen in 2021.

While trade tension/uncertainties remain, the Phase One trade deal reduced tariffs and resolved many of the non-tariff barriers to exports, including the required GMO processing certificates and TRQ management for corn, the DDGS plant import licenses, and export facility registrations, and resulted in a U.S. barley export protocol.
China scaled back its commitment to using E10 nationwide by 2020 due to reduced corn inventories, but there are still opportunities to advocate for low-carbon and renewable fuel benefits of E10.
Sell-sufficiency remains a focus in China’s grain and trade policies, China is also looking for reliable and stable grain/oilseed suppliers. State trading is expected to play an increasing role in the coming years in grain trade.