China may become the largest importer of corn

This creates good perspective for increasing the export of Far Eastern corn
The Chinese Government may increase quota for corn imports at minimum tariffs for 2021, as «Vedomosti» cited Reuters. In September, the PRC Government set the same quota as in 2020 — 7,2 million tons, but due to increased demand for animal feed, as well as damage to domestic crops from storms and drought, this quota may be increased by 20 million tons.

Such an increase in corn imports would make China the world’s largest importer of the crop, which as Reuters said, could push up global prices for corn and other grains. Now China is the second largest consumer of corn in the world after Mexico, which, according to the US Department of Agriculture (USDA), imports 18.3 million tons of grain.

If China becomes the world’s top corn importer, it will change the global grain trade and encourage corn growers around the world to plant more corn in order to meet Chinese demand. This has already happened with soybeans before: since China began importing this crop in the 1990s, farmers in Argentina, Brazil and the United States have significantly increased soybean plantings. «Over the next decade, China could change the landscape of the global corn market by ramping up imports,» Terry Reilly, senior analyst at Chicago-based brokerage Futures International, told Reuters.

The total annual demand for corn in China is 280 million tons and is mainly met by domestic production. Until today, Chinese importers have never chosen the full annual quota for corn imports at the minimum tariff of 7,2 million tons. However, according to Reuters sources, Chinese importers have already ordered about 12 million tons of corn from the United States this year and about 5 million tons from other countries, including Ukraine.

The increase of global demand may have a positive impact on the corn export from Russia. «The record was set in the 2017/18, when we exported 5.7 million tons. Russia is experiencing significant competition in the Black Sea Region, primarily from neighboring Ukraine, which for the second year continues exporting record volumes of corn — more than 30 million tons, which is incomparable to the Russian export potential, » Igor Pavensky, the Head of the «Rusagrotrans» Analytical Center, told «Agroinvestor» in March. Now Ukraine is the fourth largest supplier of corn in the world market after the USA, Brazil and Argentina. According to the USDA forecast, this season Ukraine will export 32 million tons of corn, the USA — 47 million tons, Brazil — 39 million tons, Argentina — 34.5 million tons, Russia — 3.9 million tons.

Rudolf Bulavin, responsible for the Crop Production at the Department of Sectoral Analysis of the Federal State Budgetary Institution «Center of Agroanalytics», noted that the growth in demand from China creates good prospects for increasing the export volumes of corn from the Far East. In 2019/20, almost 104 thousand tons of this crop were exported from the Far Eastern Federal District to China.
Source: specagro.ru