April 14, 2015
China''s 2014/15 state corn reserve to reach 80 million tonnes
China is expected to stockpile a record high of 80 million tonnes of corn thisyear, up from its 69 million tonnes in 2013/14, according to a senior trader at COFCO last Thursday.
Zhu Yongsheng, deputy general manager of COFCO''s risk control and bio-energy department,also mentioned in a conference in Shanghai that China will most likely end up with more than150 million tonnes of corn in its inventory by the end of 2014/15 with the addition of the huge stockpile.
China''s state corn reserve has surged tremendously in recent yearsasthe government has been buying corns from farmers at high costs, but has little success selling themoff at prices some 30% higher than the international market.
With overseas corn imports being imposed with strict quota restrictions, China''s demand for corn substitutes has increased as processors seek outcheaper alternatives to domestic corn. According to Zhu, sorghum imports will likely be doubled to 7 million tonnes and barley imports will increase to 7 million tonnes, up from 4.89 million tonnes a year ago.Imports of tapioca, a replacement to corn in animal feeds, are expected to exceed 9 million tonnes, while imports of tapioca flour are expected to increase by 27% to 2.4 million tonnes.
However, corn imports will also increase to 4.37 million tonnes, up from 2.3 million tonnes in 2013/14, after the central government finally approved the import of MIR 162 genetically modified corn.
While the Chinese processors'' corn consumption has declined every year since 2010/11, Zhu believes the demand may recover to 50 million tonnesthis year, as a result of the recent increase in export tax rebate on corn starch and other corn products. He says, "We expect improvement in the starch industry this year, which may in turnhelp rise corn consumption by 1 million tonnes."