by PressChina’s grain imports hit record highs, reasons
Why China’s grain crops imports are on the rise
Last year was marked by several significant events for the agricultural market, one of which was record grain imports into China. As a result, prices jumped and exporters began to actively ship products.
At the same time, corn stocks in China have been fairly limited for several years, and here the demand for the grain has increased several times over. As a result, prices went up, which increased demand for cheaper grain. According to statistics from China’s Customs Administration, the country bought 11.3 million tons of corn in 2020, with 2.25 million tons imported in December alone. These figures were a record for the country’s market, and were twice as much as shipments in 2019. The increased demand for corn has forced a revision of quotas that the government had previously imposed. According to them, the import limit was not to exceed 7.2 million tons.
The annual quota for wheat was 9.64 million tons, and 8.38 million tons were imported. These record shipments in 2020 are surprising, especially when compared to 2019. In the previous period, China had used its annual quota for corn only 67% and 30% for wheat.
The reason for the high demand for crops by the PRC in 2020 was the rapid recovery of the pork sector. After the outbreak of African plague killed a large number of animals, but such intense growth was not expected in the country. In addition, domestic stocks of corn were small, and this caused the problem of a shortage of feed for pigs.
According to analysts, the trend of high demand in the market will continue in the current year, which means it is already necessary to prepare the ground for grain supply and stabilize prices on the world market.
The cost of corn in the local segment has reached record levels, and not all Chinese companies can buy it. Therefore, they are looking for alternatives for animal feed, buying cheaper wheat, barley and corn from suppliers in different countries. The demand is particularly high from companies in southern China, where there are a large number of farms where pigs are raised.
Over the past 2 months alone, corn futures in the country have increased by 40%, a record high for the segment.
The deficit on the Chinese domestic market has formed after large stocks were sold off here and the new crop was damaged by typhoons that hit the region.
Analysts say that demand will only grow this season and will reach above 30 million tons by the end of the marketing year.