USGC says China on track for good harvest, imports likely

by World Grain Staff
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WASHINGTON, D.C., U.S. — The U.S. Grains Council (USGC) recently concluded its annual China Corn Tour, estimating an increase in production over 2009, the USGC said on Oct. 5. The council estimates the total production for China’s 2010 corn crop at 158 million tonnes (6.2 billion bushels). Given the projected corn harvest area of 30.8 million hectares, this implies a yield of 5.13 tonnes per hectare or 81.5 bushels per acre.

"While the council is projecting higher production numbers than last year, this does not indicate a bumper crop. Conservative estimates of demand growth suggest China will likely need to import," said Thomas C. Dorr, USGC president and chief executive officer.

In the 2011 calendar year, the council anticipates China to import 2 million tonnes (78.7 million bushels) of U.S. corn and 2.5 to 3 million tonnes of U.S. distiller’s dried grains with solubles, a co-product of U.S. ethanol production.

The council’s annual China Corn Tour, which began in 1996, consists of two major surveys in the North China Plain and in Northeast China. These two areas represent 71% of China’s corn production. The remaining 30% is dispersed and difficult to survey.

The U.S. Department of Agriculture estimates China’s corn production at 166 million tonnes (6.5 billion bushels) with a 40 million tonne (1.6 billion bushel) carryover. An independent consulting firm in China projects a 158.7 million tonne (6.2 billion bushel) corn crop with a 30-35 million tonne (1.2-1.4 billion bushel) carryover. The Chinese government currently projects 165 million tonnes (6.5 billion bushels) with a 55-60 million tonne (2.2-2.4 billion bushel) carryover.

China’s demand growth is expected to continue. Dorr said the most rapid growth is in the industrial milling sector which may expand by 15% or more next year. He said demand for feed continues to grow at rates of three to five percent each year. Dorr said it all adds up to an opportunity for U.S. corn.

"China has imported significant amounts of soybeans, DDGS and now corn. The council believes this reflects a recognition by Chinese government officials that food security does not necessarily have to be built on food self sufficiency," Dorr said. "In the U.S. the harvest is fully underway with farmers in all major grain growing states working to bring in what looks like to be a large 2010 crop. The U.S. will continue to be a reliable supplier of corn and co-products and we look forward to China being a long-term U.S. trading partner."

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