Corn output in China, the second-biggest consumer, may be less than projected this year as rain and flooding in the northeast damaged crops, boosting the need for more imports, according to a local researcher.
Production may fall about 2.7 percent from an Aug. 14 estimate to 179 million metric tons, Feng Lichen, the general manager of Dalian-based grain advisory company Yigu Information Consulting Ltd., said yesterday. Feng estimated last year’s harvest was 181 million tons, lower than China’s official figure of 205.6 million tons.
A smaller crop may lead to higher imports of the grain used in food and livestock feed, as demand continues to outpace production. Inbound shipments may reach a record 7 million tons in the 12 months starting Oct. 1, the U.S. Department of Agriculture estimates. China made its first-ever purchase from Ukraine this year, increasing competition with the U.S., the biggest supplier, and Argentina.
“Too much rain has caused some crops to fail,” said Feng. “Domestic supply could easily become tight from a current surplus.”
Heavy rains and lower temperatures in the northeast caused flooding and hail damage since Aug. 14, the China National Grain and Oils Information Center said Aug. 19. The top producing region received as much as 50 percent more rain than the average in previous years.
Corn for delivery in December on the Chicago Board of Trade rose 1 percent to $4.91 a bushel at 1:08 p.m. in Beijing. Futures on the Dalian Commodity Exchange were little changed at 2,338 yuan a ton, or $9.70 a bushel.
Dalian prices have slid 3.9 percent this year on the prospect of record imports and a larger local crop. State reserves hold about 30 million tons bought from farmers this year, which has weighed on prices, said Feng.
Low temperatures caused by rains can slow or halt crop development, weather service Xn121.com said yesterday. China, which the USDA estimates will consume about 207 million tons this year, has ordered more than 4 million tons of U.S. corn for delivery after Sept. 1, the grain center said.
“It’s looking wet and cold in the northeast, and that adds risks to crops,” said Li Qiang, the chairman at Shanghai JC Intelligence Co. “Temperatures and early frost in the next month are the key to watch for.”
Temperatures in the Jilin province, located in the center of the northeast, will average 17 degrees Celsius (63 degrees Fahrenheit) in the next week, lower than the average of 19 degrees in previous years, according to Xn121.com.