August corn imports up 14-fold year-on-year

Source:Reuters-Global Times Published: 2017/9/24 17:13:39

Up to 20m tons to be needed annually to meet ethanol usage: analyst

China imported 380,000 tons of corn in August, a 14-fold year-on-year jump, as buyers stocked up on cheaper imports after domestic prices of the grain rose, data from the General Administration of Customs showed on Saturday.

Imports of the grain had surged in July to 910,000 tons, the fourth highest volume on record.

Corn is mainly used to feed livestock and China is the world's top pork producer.

Corn imports shrank at this time last year after domestic prices plummeted in the months following the end of a State stockpiling scheme.

China could import up to 20 million tons of corn a year, more than six times the current level, to meet a switch to greater use of ethanol in fuel, Cherry Zhang, a senior corn analyst with Shanghai JC Intelligence Co, predicted at a conference.

The country plans to roll out a gasoline known as 'E10' - containing 10 percent ethanol - across the world's largest car market by 2020.

As much as 15 million tons of ethanol will be needed when the policy is implemented, according to Reuters' calculations, or about 45 million tons of corn, the major raw material ethanol is produced from.

More corn is already being consumed closer to cornfields in the top growing region in the northeast after a series of measures were introduced last year to use up State stocks.

Meanwhile, ongoing expansion of the corn processing sector will leave less available for sale to feedmakers in other parts of the country, said Zhang.

"This will cause a supply gap in the south, and we might need imports to fill it."

Corn transported out of northeast China will fall to less than 30 million tons in the coming 3 to 5 years from current levels of around 50 to 60 million tons, she noted.

China's corn consumption in 2017/18 is expected to increase by 8.4 percent to 221.97 million tons, according to the China National Grain and Oils Information Center.

Zhang's forecast is significantly higher than projections by the US agriculture department, which expects that corn imports will reach just 3.8 million tons in the 2019/20 crop year.

Imports are forecast at 1.5 million tons in the 2017/18 crop year, China's agriculture ministry says.

Posted in: MARKETS

blog comments powered by Disqus