China expects a bumper 2020-21 corn crop at around 266.5 million tonnes, but that’s still not enough to meet demand from the country’s livestock industry. the DCE exchange raised margin for corn futures, trying to cool down the speculation. https://qmhedging.blogspot.com/2020/09/dceadjustments-to-trading-margins-for.html Soaring corn prices are stoking food security jitters in China, where food inflation has climbed to the highest in over a decade and President Xi Jinping made a recent high-profile plea for an end to waste. The price surge in corn — critical for China’s mammoth hog, dairy and poultry sectors — is the latest in a series of disruptions that include a devastating pig disease, pandemic-driven upsets for international suppliers and warnings of a growing food supply gap. Prices have risen as the country heads for its first real corn shortfall in years in the upcoming 2020-21 season starting in October and could face a deficit of up to 30 million tonnes, around 10 percent of its total crop, say analysts and traders. That would be a likely boon for major exporters like the United States and Ukraine, but threatens to push up global prices and have a knock-on impact elsewhere as some corn users switch to other grains. “It is certain that there will be a corn shortage in the future, and we would need to import a lot next year,” said an executive with a state-owned trading firm, who declined to be identified because he was not authorized to talk to media. Maintaining food supplies is a major source of political legitimacy for the ruling Chinese Communist Party, but it has struggled to balance central planning with grain market forces. Struggling with bulging stockpiles, China four years ago abandoned a scheme that paid farmers above-market prices for corn and has since produced less of the grain than it consumes. The state stockpiles that supplemented supply are now nearly gone. Corn prices in Jiamusi at the heart of China’s grain basket hit a five-year high at 2,050 yuan (US$297) a tonne on Aug. 26, up 27 percent since the start of the year, before edging down after that. This has contributed to a broader rise in food prices, also driven by severe flooding in the south, pockets of drought in the northern grain belt, and a continuing pork shortage. President Xi underscored concerns when he urged the nation to stop “shameful” food wastage, prompting many local governments to launch related campaigns. China expects a bumper 2020-21 corn crop at around 266.5 million tonnes but that’s still not enough to meet demand, according to the agriculture ministry, which forecasts year-end stocks of minus 16.7 million tonnes. That shortfall could be up to 30 million tonnes, according to five analysts and traders surveyed by Reuters, far exceeding China’s current import quota of seven million tonnes, a figure it has never filled. “If the government does not loosen regulations regarding the import quota, we will be facing a huge shortage,” said a Shanghai-based domestic agriculture products trader. The need for imports is likely to be limited by substitution, given China’s ample supplies of other staple grains, as well as imports of other substitute grains like sorghum and barley. “Based on the aggressive new crop buying we’re seeing for U.S. corn, it seems increasingly likely China will raise the quota or make some changes,” said Darin Friedrichs, senior analyst at StoneX in Shanghai. “But I don’t anticipate (it) being too big. I think roughly about 10 million tonnes seems reasonable, for next year.” Feed manufacturers that use nearly 200 million tonnes of corn a year to fatten hogs and chickens are already turning to more plentiful wheat. Feed wheat use in the 2020-21 crop year could rise as high as 20 million tonnes, up about five million tonnes from previous years, and about 15 percent of output, said a government think-tank researcher, who declined to be identified saying he was not authorized to talk to media. China, meanwhile, has vowed to make record U.S. agricultural purchases this year as part of its Phase 1 trade deal, and made its biggest purchase of U.S. corn in a month recently as it looks to boost supplies. “Corn on the international market is so cheap, why not?” said the trading firm executive.
Isn't china good with corn producing? I think their alliance with russia might help them out, but then after covid19, I am not sure what to expect.
There are many youtube channels on US farming. Here is the statistics on production. https://www.statista.com/statistics/254292/global-corn-production-by-country/ Here is export. https://www.indexmundi.com/agriculture/?commodity=corn&graph=exports
Russia has 5% of China’s corn production. Only 7% of Russia is arable. US #1 @ 346M tons China #2 @ 261M tons Brazil #3 @ 101M tons European Union #4 @ 67M tons Russia: 14M tons Russia is the third largest wheat producer in the World
USA corn is genetically modified and undesirable to most nations regardless of quantity produced. Even here in the USA its mostly used as a feed stock and a cheap form of sugar or starch. China only uses corn for feed stock as well. But feed stocks are variable and can be substituted by soy easily. Its just price that moves these decisions. USA's livestock industry (particularly beef) is much more susceptible to feed shortage jitters. Raising cattle is very expensive and shortages can cause huge price increases to an already unpopular food choice. Asia, Europe and South America do not import US beef because of all the hormones and antibiotics. This expensive commodity is limited to the captured audience of the USA only. The USA is trying desperately to get China to buy both US corn and beef. China Food shortage propaganda is fairly common in this attempt to coerce China into buying these commodities.