China is the largest grain market worldwide and therefore an attractive destination for corn exporters. However, the country has forecasted in February that 2017 will be a year with historically low corn imports, and the trend seems to support this statement.
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Data from China Customs shows that China imported 3.17 million tonnes of corn in 2016, down 33% YoY, and national organisations predicted that the figure would be only 800,000 tonnes in 2017, 1/3 of the annual average of the past ten years.
China’s corn prices have plumbed after the abolishing of China’s price support program, which leads the market to a less attractive destination for traders since the domestic corn price and imported corn price are getting closer.
It is worth notable that the decreasing import volume of corn is also related to the rising imports of corn substitutes in China, such as DDGS, barley, sorghum, and cassava.
The largest corn exporting nations as suppliers are traditionally Ukraine and the USA. Both countries are feeling the weaker demand for corn in China, since the abolishment of the corn stockpile policy and the resulting flooding of cheap corn in the market.
According to Tranalysis’ research, China’s grain import volume from January to April 2017 has been more than 309 thousand tonnes, which represents a year on year decrease by 82.2%. Of this import volume, 287 thousand tonnes came from the Ukraine alone, while the USA contributed almost 16 thousand metric tonnes.
The import volume for this four months was almost entirely shipped in January and February. In March, China imported just 5,200 tonnes of corn, while April did not even saw 3,000 tonnes of corn imports. The month of March also saw the highest import price for maize in 2017 so far, stating USD0.52 per kg. That is more than double the price of February.
In May, the import volume began to recover again, showing an import volume of 42,200 tonnes. The import price in this months also fell by about a half of what it was in April 2017.
In June 2017, China’s corn imports have surged again, showing a year on year increase by 600% and a soar of about 900% to May 2017. This huge boost in corn imports can be explained with a downwards corrected corn output forecast by the Ministry of Agriculture, due to droughts in critical corn planting areas in China.
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