Indiana Grain Company, LLC

Posted: 07/25/10

By: tomgrisafi

We at Indiana Grain love corn.

But apparently not as much as the Chinese do.

In a new report out today from Bloomberg, China may import as much as 15 million tons of corn by 2015 as demand outstrips local supply and the country enters a “new era” of buying from overseas, the U.S. Grains Council said.

That assessment was gleaned from info directly from Shanghai JC Intelligence Co.

From the Bloomberg report: "Imports may total 1.7 million tons this year and 5.8 million tons next year, the council said, citing Shanghai JC Chairman Hanver Li. Even with normal weather, the second-largest corn consumer won’t be able produce enough to meet demand as incomes rise, the council said on its website, citing Li."

China’s emergence as a net corn buyer may help to drive global prices higher.

"Imports of 5.8 million tons would surpass China’s previous record purchases, according to U.S. Department of Agriculture data. Corn is used to make animal feed, with demand rising as consumers buy more meat and dairy products," Bloomberg noted.

“The natural market to supply China in the corn space is certainly the U.S.,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia said, referring to the top producer and exporter. “China buying is certainly something that’s going to be supportive for global grain prices.”

Corn has risen 8.4 percent since April 27, a day before the USDA reported the first corn sales to China by U.S. exporters of at least 100,000 tons since 2001.

Source: Bloomberg