By Ross Korves, USGC Consultant, Economic Policy Analyst

A recent buyer workshop tour through China reiterated a well-known fact that China will become a large and permanent importer of corn. Discussions with local buyers and end-users projected import volume to reach anywhere between 10 to 30 million metric tons (390 million – 1.2 billion bushels) of U.S. corn over the next several years.

Nevertheless, the lack of consistent market data on China’s production capabilities remains an ongoing challenge in obtaining more precise estimates of China’s future demand schedule. The wide range of import projections, given previously, only confirms that market intelligence is nontransparent, even among domestic producers. Moreover, the market information that does exist is not publicly shared.

Industry professionals in the United States have generally accepted the current price of corn in China as a fairly accurate reflection of China’s grain market level. However, record prices in addition to a strong crop in 2011 are not conducive to typical market dynamics. At the time of the trip, corn was trading at $9.00/bushel, indicating that supplies are tight; yet, on-site consultations revealed that supplies may be more plentiful than what prices suggest.

Up to now, discussing what we don’t know about China was an interesting sideline, but as China continues to emerge as a major buyer, market intelligence takes on real importance. The immediate question is how this information need will be reconciled.