China's corn imports will likely hit a record-breaking 28 million metric tons for the 2020-2021 marketing year as the country restocks its domestic reserves and deals with rising demand for livestock feed, according to the Beijing office of USDA's Foreign Agricultural Service.
That estimate is substantially higher than the forecast of 24 million tons in USDA’s April World Agricultural Supply and Demand Estimates. The 2020-21 marketing year ends Aug. 31.
“Speculators, mills/plants, and local government reserves are building up corn stocks over fears of future supply chain disruptions, and concerns over weather-related issues that could lower production,” the FAS analysts said. “Sources indicate that substantial (Chinese) corn imports will be necessary to control further price increases and maintain buffer stocks throughout calendar year 2021.”
Chinese customs data show that China imported 11.3 million tons of corn in calendar 2020, according to FAS. That would mean China has for the first time imported more than the tariff rate quota that it established upon joining the World Trade Organization.
And Chinese imports heated up quickly in 2021 as the country made record purchases from the U.S. China committed to buy more than 5 million tons of U.S. corn in the last week of January alone and purchases have remained strong.
Export sales, the FAS report says, are extremely high and far beyond physical shipments for now.
As of April 8, there were outstanding sales of 13.7 million tons of US corn to China, according to the latest USDA data, which will be updated Thursday.
“Future Chinese corn imports will be defined by imported corn prices, prices of alternative grains, and China’s pace of progress in restocking the swine herd after earlier and recent (African swine fever) outbreaks,” says FAS.
FAS expects China's imports will slip to 15 million tons for the 2021-22 marketing year as domestic production improves.
China maintains that it has the spread of ASF under control as it rebuilds from the substantial damage the virus caused, but U.S. government and industry officials say they are not fully convinced and continue to monitor the situation.
National Pork Producers Council NPPC CEO Neil Dierks said recently that there are plenty of anecdotal reports that suggest “there’s a long way to go” before China can assure that the swine disease is under control.