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China Likely to Purchase 2 to 3M Tons of Corn

08 April 2011
U.S. Grains Council

US - Chinese sources told the US Grains Council that state corn reserves are 10-12 million metric tons (390-472 million bushels) of corn less than previously thought for the 2011/2012 crop year.

"After reviewing the figures with a number of sources, I believe it is possible that China will purchase another 2-3 million tons (79-118 million bushels) of corn prior to the end of the 2010/2011 crop year," said U.S. Grains Council President and CEO, Thomas C. Dorr. "Chinese buyers would ideally like 5-7 million tons (197-276 million bushels) but realize present global inventories may not accommodate this added demand."

The economic growth in China, and throughout Asia, is placing stronger than anticipated demands on livestock, poultry and dairy supplies.

If the United States is to capture the long-term value of this change in the US-China corn trade relationship, Dorr believes it is important for both countries to develop a system that adequately signals demand, which, in turn, convinces US producers to increase production to meet the new demand. One critical component of developing this relationship will be China's ability to work with US suppliers to provide an accurate reading of production estimates and carryover stocks.

"US farmers need consistent signals, and if given the correct ones, they will step up to the task at hand. Chinese buyers and end-users need to be transparent with regard to becoming a sustainable market," he said.

Dorr also said it is in the interest of Chinese and U.S. corn farmers and their customers to produce normal to above-normal trend yields, emphasizing the importance for both countries to work to foster the most efficient use of seed and production technology possible.

TheCropSite News Desk

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