by PressGrain reserves in China will be replenished in at least 6 months
Corn and soybean replenishment: problems in the Chinese market
The shortage of grains on the Chinese market and the increase in demand for them affected the trade processes. Prices for products went up sharply, and suppliers began to increase export volumes, reducing stocks. Experts estimate that China will need at least 6 months to finish replenishing stocks of corn and soybeans. Until then, the country will continue to increase export volumes.
So far, China’s buying power is only growing and is not going to decrease.
The country is buying heavily from the United States to feed its growing hog herd. Local suppliers have already shipped record amounts of corn to China and soybean exports are growing at their fastest pace since 1991, according to the U.S. Department of Commerce.
In turn, soybean shipments are boosting profits. At Gulf of Mexico ports, for example, it has increased by the highest amount since 2016.
According to forecasts, China will buy about 20 million more tons of corn, which will meet domestic demand for feed crops, as well as replenish stocks to avoid food shortages. And this volume is about twice as much as the import quota for the year, which is designated by the World Trade Organization.
China is increasing imports not only from the United States, for example, last year the country was among the ten largest buyers of grain from Ukraine. In addition contracts for barley from France and Canada have been signed. Such activity suggests that China has every chance to become the largest exporter of crops on the world market.
The problems of feed shortages for the livestock sector in China have forced local authorities to think about the development of agriculture. This is especially true for the seed sector, which requires large investments. An important point is also the modernization of the rural industry as a whole, so that in the future the country will no longer face food shortages.
Despite the fact that new varieties of vegetables and cereals are regularly introduced in China, the problem with yields is still relevant, which means it is necessary to change the approach and increase investment in the seed sector. In addition, it is also necessary to expand the cultivated area and develop mechanisms to improve yields. According to experts, consumption of grain crops in the coming years will only grow, so it should be given special attention.
This raises the problem of growing food inflation in the world market. As a result, following cereals, prices for dairy and meat products, which depend on fodder crops, will rise.