China Corn Imports Seen Soaring

China's rapidly growing industrial uses for corn, including ethanol, could force the country to import 10 million metric tons per year by 2010, a senior official said on June 17.

By 2010, China will have to satisfy a 26% rise in corn demand, as production of ethanol and corn starch grows and feed use increases, Zhu Changguo, chairman of the state-backed Chinese Cereals and Oils Association, told a Dalian Commodity Exchange conference in Hangzhou.

Corn consumption will rise at an average of 5% a year through the end of the decade, with use for ethanol increasing 10% a year, use for starch rising 20% per year and feed usage growing 2% annually, Zhu predicts.

According to Reuters News Service, Zhu says Beijing's planners, loath to give up the Maoist dream of grains self-sufficiency, would seek ways to keep cap imports at 5% of China's total grains needs.

“We will need imports to meet the corn deficit. But big policies must consider price stability and grains security," Zhu says. "When China imported corn in 1995, the international price reached $204/ton." U.S. corn in Asia now fetches about $160/metric ton.

China would try to cap the need for imports by adding seed subsidies for corn, reigning in new ethanol projects, conducting transgenetic research, improving transport and agricultural financing, and limiting exports, Zhu says.

Corn consumption in 2005 accounted for 125 million tons out of total Chinese grains consumption of 500 million tons, Zhu says.

China's bumper, 484-million-ton grain harvest last year included 139 million tons of corn, a 7% rise on year. But the weather this year looks less favorable, especially in the Northeastern grains belt, Zhu says.

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

http://www.brockreport.com/brockreport.