The U.S. ag attache in China has lowered its forecast for 2013-14 corn imports by 2 MMT to 5 MMT due to continued trade disruptions. The attache outlined the situation in which the country began to rejecting shipments of U.S. corn due to detection of the unapproved biotech MIR 162 trait. It notes that traders have rerouted this shipments to neighboring markets, but there is no indication the situation will be resolved quickly.
"China’s slow and unpredictable biotechnology regulatory system, combined with a lack of a low level presence policy for unapproved biotechnology events, has created a challenging environment for agricultural imports that is likely to persist or worsen," says the attache, who predicts China's corn carryover in 2013-14 will be the highest in over a decade at 76.5 MMT.
"Although grain stock data is a state secret in China, more than half of the reserves are estimated to be state held," states the attache. "During an annual meeting in January 2014, the State Grain Administration stated that China’s grain stocks were at 'a relatively high level in history.' The government is reportedly building more storage capacity to support its minimum price purchase program."
The attache pegs the 2013-14 Chinese corn crop at 217 MMT, equal to USDA's current (as of January) estimate.