U.S. Corn Cargo En Route To China
The first significant shipment of U.S. corn to China in years is making its way across the Pacific Ocean, opening the door to a potentially lucrative market, U.S. grain and shipping sources told Reuters News Service on Wednesday.
The 52,000 metric ton cargo of genetically modified U.S. corn is welcomed by the market. But Chinese buyers are not expected to make large purchases of U.S. corn in the near future.
China's growing industrial uses for corn could push imports to 10 million tons per year by 2010, according the state-backed Chinese Cereals and Oils Association.
China has been a large, consistent importer of U.S. soybeans since 1992 and is now the No. 1 buyer.
Chinese firms have been cautious about importing U.S. corn due to government regulations and volatility in the commodity markets.
Companies have tested the government's reaction by importing 100-ton containers of U.S. corn. Xiwang, in the northern province of Shandong, was the first company to book an entire Panamax cargo.
China's import tax and duties of 14% are also likely to limit the amount of corn imported. Xiwang can avoid the taxes because it exports finished products.
Editors note: Richard Brock, The Corn and Soybean Digest's > Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at