by PressIn China, corn feed will continue to be replaced by wheat: market overview
Why China has to cut back on corn feed
Last year, China faced a shortage of corn for feed production. The reason was a sharp increase in the number of pigs, which had previously declined due to the African plague epidemic. To provide the industry with food, farmers replaced corn feed with wheat.
Another reason for the substitution was the high price of corn on the domestic market, forcing local feed producers to look for alternatives to meet demand from livestock industry participants.
Since last December, the cost of corn has skyrocketed in the Chinese market, and in this case, wheat prices are lower, so it is more profitable for feed purposes.
In March, the price of corn on the domestic market was 2,806 yuan per ton and wheat was 2,519 yuan per ton. After a while, the price of corn reached a record high. Such a situation led the government to start selling wheat from state reserves. According to official data, from January to March of this year, more than 26 million tons of wheat was sold at national auctions, which exceeded the figures for 2020 by 2.83 million tons.
According to experts, the increase in grain supplies in the country will continue until the end of 2021, this applies to both wheat and corn.
All in the first two months of this year, imports of wheat to China showed an increase of 265% and reached 2.48 million tons. In the same period, corn supplies exceeded 414% and amounted to 4.8 million tons. As for barley imports, it increased by 79.4% to 1.32 million tons.
China purchased 11.3 million tons of corn in 2020, 136% more than in 2019. In turn, the volume of wheat exports in this period reached the mark of 8.38 million tons, an increase of 140% over the previous year. Barley was imported over 8 million tons, 36% more than in 2019.
There has been a decline in corn prices for the last month, but experts warn that the market is still unstable, and the situation could change. Replacement of this crop with wheat will continue in the future. Analysts note that the share of wheat in feed production will continue to grow if the difference in its value and prices of corn is reduced to 100 yuan per ton.
Experts predict that the high cost of corn will remain until the end of this year, despite the fact that farmers in the country have increased crops.