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Bumper Chinese corn harvest a ‘relief’ for beleaguered US

By RJ Whitehead , 11-Oct-2012
Last updated on 11-Oct-2012 at 18:34 GMT

The US Grains Council (USGC) has projected another bumper crop of Chinese corn, and voiced its relief that China can step up to the plate as the US faces a tough harvest.

This prediction, fuelled by higher yields and an increase in planted acreage, comes in spite of persistent reports of weather and pest problems in some areas of the country this summer, while the impact of recent typhoons in northeastern China had raised concern about there being potentially significant yield reductions. 

Negligible impact 

However, the council's survey suggests that the impact of these events has been relatively small. Yet while the final harvest will fall short of best-case expectations, it will still be another record year for Chinese corn.

The American drought and short 2012 crop is pressuring buyers in all sectors,” said USGC president and CEO Tom Sleight. “But corn trades as part of a global system, and the safety net is the capacity of other producers to step up.”

China is the world's second largest corn producer and until 2010 was an export competitor of the US in Asian markets. In 2010, however, China became a structural corn importer, and last year purchased nearly 5.2m tonnes of corn from the US, making it the third largest American export market.

Indeed, FoodNavigator-Asia last month reported that corn imports to China are expected to hit 20m tonnes per year by 2017, which should lead to major reverberations in world markets. This prediction came following a study by Rabobank that looked at the vast scale of corn required to feed China’s swine herd as the country industrialised its pork sector.

Infrastructure evolving

As China’s need for corn dramatically increases, its potential to produce is quickly going downhill. Last year, an estimated 700,000 hectares of arable land was taken out of use by the country’s road-building programme—enough land to produce 3.7m tonnes of corn. 

According to the US Department of Agriculture, China harvests nearly as much corn acreage as the US—31.5m hectares compared to 32.9m hectares last crop year—yet the country only manages to produce about half as many tonnes as the US.

Taking a positive spin on this year’s predictions, Sleight added that China’s harvest was good for global supply and allowed the US some breathing space: “In a tough year for its corn, it is a relief that the world's number two producer is having a good year. That will help limit demand destruction and preserve markets for American corn as we rebound next year.”

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