China Seen Cutting U.S. Corn Imports on Higher Prices
China, the world’s second-biggest corn user, may import fewer shipments from the U.S. than forecast due to rising costs since the worst drought in decades hit the top grower, a state-owned researcher in the Asian country said.
Imports in the year beginning Oct. 1 may total 3 million metric tons, compared with 5 million tons projected by the U.S. Department of Agriculture, the China National Grain & Oils Information Center said in an e-mailed report today. The center forecast shipments of 6 million tons on July 11.
Imports from top exporter U.S., based on the Chicago Board of Trade benchmark, to be shipped early next year will cost about 3,000 yuan ($470) per ton on arriving at Chinese ports after all costs, according to the center. That’s about 450 yuan more than the domestic price, “creating barriers for imports,” according to the report.
“China only imported corn when there were profit margins,” said Dalian-based Feng Lichen, general manager at Yigu Information Consulting, which runs the country’s largest information website by membership on the commodity. “Domestic corn prices will rise to match costs of U.S. supply before China considers imports,” he said.
Without the imports, there’s increasing “pressure for the domestic harvest to gain” to make up for the projected shortfall, and feed wheat consumption may rise, the grain center said in the report.
There will still be growth in corn demand which won’t be met by production this year, Daron Hoffman, an analyst at Rabobank International, said from Shanghai. “There is still room in the market for imports to grow over and above” this year’s shipments, he said.
Chinese imports may rise to 8 million tons in 2012-13, Rabobank analyst Jean Yves Chow said July 12. Shipments in the year ending Sept. 30, may be 5 million tons, according to USDA.
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