China Changes Their Tune On Corn Imports
Jan 17, 2011
If you remember, last week the word coming out of China was they had "officially" killed all thoughts and talk regarding "corn" imports for 2011. They had plenty of corn, and at the current price levels had no need or intentions of importing any corn. How quickly things change. Over the weekend the Chinese Grain Network now claims that China may actually need to be a net importer of at least 1 million metric tons of corn this year because the government price-control operations have diminished their corn reserves. The 1 million ton estimate is certainly lower than most in the trade had been projecting, but better than "none". It is tough to get any accurate data out of the Chinese government or their agencies, so who really knows the truth. I am continuing to hear reports out of China that they are expecting their corn consumption to increase from 3% to 5% this year. If the rumors are correct, and the Chinese government only has about 7 million tons of corn left in reserves, things could certainly get tight. Talks on the inside claim the Chinese government has burned through about 30 million tons of their corn reserves trying to slow prices in 2010 and have yet to replenish. This essentially leaves them with less than one month of consumption. I find it highly unlikely that they will be able to keep from importing in 2011.
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