China's corn crop seen rising to record
Inbound shipments may more than double to 7 million metric tons in the 12 months starting Oct. 1, even as the local harvest expands by 2 percent this fall, according to the median of five estimates compiled by Bloomberg. Independent researchers in China have historically worked with smaller numbers than official statistics and don't use a common baseline figure. Researcher Cngrain.com said the domestic crop will be 212.5 million tons.
Rising meat consumption in the world's fastest-growing major economy has spurred demand for corn to feed animals and may help cut global stockpiles that U.S. Department of Agriculture project to be the highest in 13 years. Futures surged 56 percent in China over four-and-a-half years, encouraging domestic planting while making farmers from the U.S. Midwest to Argentina and Ukraine more competitive.
"If the weather remains normal, we may see moderate expansion in China's output," Zhang Qi, an analyst at Yigu Information Consulting Ltd., China's biggest corn market information provider, said from Dalian on June 24. "Next year's U.S. crop will probably be very cheap, and feed makers or even state reserves may want to get that inexpensive corn."
Planted areas in northeast China, the biggest producing region, may have fallen slightly, while central and northern areas may gain by a small amount, said Li Qiang, chairman of Shanghai JC Intelligence Co., without quantifying his expectations. Li, who toured the northeast last week, said even with the bigger harvest, imports will increase because they are cheaper.
China controls imports through issuance of 7.2 million tons of low-tariff quotas, according to the National Development and Reform Commission. The government controls the majority, while private companies split less than 3 million tons, according to NDRC.
China bought a record of 5.23 million tons in the marketing year ended Sept. 30, 2012, and shipments in the current period are forecast to fall to 3 million tons before jumping to 7 million tons next year, the USDA forecast June 13.
The U.S. agency forecast the Chinese corn crop to expand 3.4 percent next year to 212 million tons.
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