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China's Reliance on US Corn Set to Explode by 2016


Posted: 02/23/12

By: tomgrisafi

3229

According ot the latest industry reports and estimates, corn imports by China, the world’s second-largest consumer, may surge sevenfold to a record 28 million metric tons by 2016 as local production fails to keep pace with increased demand, according to INTL FCStone Inc.

From Bloomberg:

"Imports may gain from 4 million tons in 2011-2012 and reach 13 million tons by 2012-2013, Mike O’Dea, senior risk manager, told a conference in Singapore. The local harvest may reach 187 million tons next year, 6.5 percent less than projected demand, according to a presentation from O’Dea.

The country’s looming structural corn deficit may support prices and boost global food costs. China should increase its agricultural imports to help feed its 1.3 billion people and ease pressure on the environment, a state-affiliated researcher said last year. China needed to maintain reserves of 50 million to 60 million tons to guard against disruptions, O’Dea said.

“We’re projecting a doubling of imports this year, and doubling again next year because they’ve got to maintain that reserve stock,” said O’Dea, who’s been in the grains industry for three decades. The government sold some of its corn stockpiles last year to combat inflation, he said.

Corn for delivery in May was unchanged at $6.4125 per bushel on the Chicago Board of Trade at 12:52 p.m. in Singapore. The price has declined 0.8 percent this year. Global ending stockpiles may be 125.3 million tons this year, the lowest level in five years, according to the U.S. Department of Agriculture."

Source: Bloomberg

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