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China 2015 corn, corn substitutes imports at record due to cheap prices
January 31, 2016 RECORDER REPORT 0 Comments E-mail Print PDF
China imported a record volume of corn and corn substitutes, including distillers' dried grains (DDGS) and sorghum, in 2015 driven by cheap overseas prices, but imports this year could fall by more than 50 percent, traders and analysts said. China shipped in a record 6.82 tonnes of distillers' dried grains (DDGS) in 2015, a rise of 26 percent from the year before, official customs data showed on Tuesday, as feed mills replaced expensive domestic corn with the cheaper dried grains.
However, DDGS imports to China, the world's top buyer of the grain, a by-product of corn-based ethanol, are expected to decrease by more than 50 percent this year. Beijing has launched a one-year-long probe into imports from the United States, the world's largest DDGS exporter, that should limit Chinese buying, analysts have said. "There would be almost no imports from April. We have not heard any deals signed recently," said one trader with a major Chinese buyer in the northern province of Shandong.
Imports in December were 419,896 tonnes, down from November's 464,949 tonnes, data from the General Administration of Customs showed. China imported a record 42.35 million tonnes of corn and corn substitutes altogether last year, up from a total import of 27.7 million tonnes in 2014, according to Reuters calculations based on official data. Barley and sorghum imports in 2015 topped 10 million tonnes each.
Mills import corn substitutes to replace expensive domestic corn that is nearly 50 percent more expensive than global prices because of government efforts to support Chinese prices and boost rural income. However, China, the world's second-largest corn consumer, is planning to reform its pricing. The country will let the market decide its domestic state corn prices to help cap the country's rising imports and record high level of state reserves, a senior government official said on Monday. "Overseas price for corn and corn substitutes are less competitive while government control over import permits could reduce imports by one third or half this year," said Li Qiang, chief analyst with Shanghai JC Intelligence Co Ltd (JCI).
Traders said Beijing has been slow in issuing permits for imports of barley, cassava, DDGS and sorghum after it introduced a new system from September last year. Imports of DDGS, barley, cassava and sorghum are free of quota restrictions, unlike corn. In 2015, China's corn imports were 4.7 million tonnes, a rise of 82 percent from 2014.
Corn imports were largely from Ukraine, at 3.85 million tonnes in the whole year of 2015, under a loan-for-grain deal between the two governments, followed with 461,789 tonnes from United States, data showed. China imported 455,986 tonnes of barley in December, down 42 percent on year, bringing the country's total imports in 2015 to a record 10.7 million tonnes, a rise of 98 percent on year, data showed. Sorghum imports in the whole year of 2015 jumped 85 percent on year to a record 10.69 million tonnes, according to customs data, cited by Shanghai JCI. Cassava imports in 2015 rose 8.4 percent on year to 9.37 million tonnes, data showed.
Copyright Reuters, 2016 | |
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Reuters article on Chinese corn/corn substitute imports in 2015
