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Commodities Buzz: China's Corn Imports Seen Lower As Millers Prefer Other Grains

Capital Market/ 11:34 , Sep 27, 2013

China's corn imports will be less than initial expectations following a switch by feed mills to sorghum, according to a latest update from the International Grains Council (IGC). The council cut its forecast for China's corn imports in 2013-14 by 200,000 tonnes to 7.0m tonnes, despite the fact that it is very competitively priced compared with domestic supplies, which face prohibitive costs for transportation from growing regions.

Despite a further drop in world corn prices, the Chinese buying interest has recently slowed, with some local traders reporting that private feed mills have now used their allocated 2.9m-tonne share of the 2013 tariff rate quota. Even 7.0m tonnes would be a record for Chinese corn imports. 

The council hiked by 400,000 tonnes to 1.0m tonnes its forecast for China's sorghum imports in 2013-14 - and hinted that further upgrades could yet be in store. Sorghum is not subject to a tariff rate quota, and with US supplies priced well below domestic corn in China, and corn import quotas already exhausted, private traders have opted to import sorghum and include it in feed mixes for the first time, the IGC noted. 

The IGC also upgraded its estimate for China's barley imports, by 200,000 tonnes, to an all-time high of 2.6m tonnes, topping the 2.5m tonnes reached two seasons ago.

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