Corn woes could boost China’s need for imports

BEIJING — Corn output in China may drop as wet, cold weather in the northeast delays planting in the second-biggest grower and raises the prospect of higher imports, according to an advisory service.

Output from Heilongjiang, the country’s top corn-producing province, may fall 15 percent from last year to 23 million metric tons as the shortened growing season forces farmers to plant lower-yield varieties or soybeans, Zhang Qi, an analyst at Yigu Information Consulting Ltd. said from Dalian. Planting has been delayed 15 to 20 days, he said.

A smaller harvest could erode domestic stockpiles and pressure the government to allow more lower-priced shipments from the U.S., where farmers plan to sow the most acres since 1936. Imports in the marketing year beginning Oct. 1 may surpass an all-time high of 5.2 million tons in 2011-2012, Zhang said.

“About 15 percent of corn acreage in Heilongjiang will go to soybeans,” Zhang said Wednesday after returning from a field study. “Growth normally in sync with the region’s climate has been disrupted and will remain so through the harvest.”

Heilongjiang may get heavy rain and lower temperatures in the three days through May 11, which may further dampen soil and slow spring planting, Xn121.com, an agriculture advisory service under the China Meteorological Administration, said on its website Thursday.

Heilongjiang last year harvested about 27 million tons, or 15 percent of the country’s 180 million tons, Zhang said. While official statistics listed output last year as 208 million tons, private researchers have worked with smaller numbers, he said.

“Some Heilongjiang farmers were already contemplating a switch to soybeans as they didn’t get very good returns from last year’s corn,” Cherry Zhang, an analyst at Shanghai JC Intelligence Co., said from Shanghai. She projected a drop in corn output of 3 million to 4 million tons this year.

Farmers in the northeast had trouble selling corn after record output and slow demand hurt prices, while excessive moisture increased molding, the analysts said.

The government will raise state procurement of corn this year to help boost grain output, Premier Li Keqiang said.

State buying in China and higher output in North America could push prices in Dalian during 2013-2014 marketing year to double those in the United States, increasing pressure on Li’s government to allow large-scale imports, William Tierney, chief economist at AgResources Co. in Chicago, wrote in an email.

“The question is, will the government allow this?” Tierney said.

Corn inventories in the United States are poised for the largest expansion since at least 1960. Output will rise 31 percent to 358.7 million tons this season, while stockpiles may surge 167 percent to 51.77 million tons (2.038 billion bushels) by next year’s harvest, according to a Bloomberg survey. Goldman Sachs Group Inc. says futures will drop to $5.25 a bushel in six months.

U.S. corn for delivery in November, when shipped to China under limited government-issued low-duty quotas, costs 2,100 yuan a ton, compared with 2,420 yuan a ton for local supply sold in Shenzhen today, according to Shanghai JC data. Private users, who have a combined 2.88 million tons of quotas for the current year, have used about 1.7 million tons, according to Shanghai JC.

More in Herald Business Journal

Mountlake Terrace-based 1st Security Bank wasn’t traded publicly during the recession, but it has seen a steady growth since the recession. (Jim Davis / HBJ)
How stocks in local banks fared since the recession

Every bank was hit hard during the recession, but most have bounced back in a big way.

Boeing bolsters team for potential 797 with leading engineer

Terry Beezhold has been chief project engineer for the 777X program.

The FCC chairman moves to repeal ‘net neutrality’ rules

His plan would allow internet providers to control broadband speeds and favor their own services.

Tom Hoban
Are millennials warming up to life in suburbia?

They dominate the apartment market and their wants need to be accounted for, says columnist Tom Hoban.

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Katie Garrison
New agent joins Re/Max Elite’s office in Snohomish

Re/Max Elite welcomed a new agent to its Snohomish office. Katie Garrison… Continue reading

UW Bothell Pub Talk looks at Greenhouse Gas Mystery

The Greenhouse Gas Mystery is the topic for the next UW Bothell… Continue reading

EvergreenHealth Monroe pharmacy interns travel to Ghana

Earlier this year, University of Washington School of Pharmacy students and EvergreenHealth… Continue reading

Everett Clinic Foundation gives $6,500 to nonprofit Christmas House

The Everett Clinic Foundation recently awarded a $6,500 operating grant to the… Continue reading

Most Read