BEIJING, CHINA — China is expected to produce slightly more corn in 2023-24 due to improved yields and mostly favorable weather, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

Production is estimated at 280 million tonnes, up from 277.2 million tonnes in 2022-23.

Total corn consumption in 2023-24 is forecast at 305 million tonnes, 1 million tonnes higher than the USDA’s June estimates due to higher food, seed, and industrial (FSI) utilization, the FAS said.  

Corn consumption in feed is forecast to increase slightly following a significant drop in 2021. Due to soaring prices, corn used in feed rations dropped from 80% to less than 40%. In 2022, feed mills used 30% more corn in feed rations than the previous year, according to the China Feed Industry Association.

“Prices of corn substitutes have increased significantly since September 2022, both internationally and domestically, encouraging the continued uptick in corn use in feed,” the FAS said.

Production and capacity in the processing sector (which includes ethanol, corn gluten meal, corn gluten feed, starch, and other processed products) is expected to grow slightly because capacity is increasing, but not significantly in 2023-24. Corn processing capacity continued to expand despite plants operating at losses as policy supports in the past several years bolstered the industry. Production capacity increased by 20 million tonnes over the past six years but actual production remains mostly unchanged and slack capacity continues growing, the FAS said.

Corn imports in 2023-24 are estimated at 20 million tonnes, 2 million tonnes higher than the April estimate, as China continues to feed more corn and build reserves.

Wheat production in 2023-24 is expected to increase slightly to 140 million tonnes from the previous year on higher planted area, the FAS said.

Imports of close to 14 million tonnes in 2022-23 are expected to exceed for the first time the 9.636 million tonne tariff rate quota from China’s World Trade Organization accession commitment.

More than 40% of the imported wheat is from Australia, the FAS said. Imports for 2023-24 are expected to remain above the historical average as China’s temporary wheat reserve is projected to drop 12% year-on-year.

“Most of the imported wheat is of higher quality and destined for flour production, and only a small percentage goes to feed mills,” the FAS said, noting that current prices are favorable for imports.