The marketing year doesn't end until Aug. 31, but China has already accomplished a feat never before seen in agricultural imports, according to the U.S. Grains Council. That’s because according to Chinese customs and the USDA, the country has imported more than 3 million metric tons each of U.S. corn, sorghum and distiller’s dried grains with solubles (DDGS).
China began the marketing year with a rapid pace of corn purchases, but announced Nov. 13, 2013, a zero tolerance for Syngenta’s MIR 162 trait, which ground Chinese imports from the U.S. to a halt. This slowdown in corn imports nonetheless created a surge in sorghum imports. China may take more than 30% of the U.S. sorghum production for the marketing year.
Market complexities aside, U.S. Grains Council says one thing remains constant – end users love the quality and value of imported feed products. Huge import margins remain for corn, sorghum and DDGS due to high domestic price support policies. Despite several years of production increases and a record crop last year, corn prices in China continue to rise.
Also, demand for high-quality corn continues to outpace available supply. According to the most recent USGC data, theoretical import margins into southern Chinese ports are almost $180 per ton.
"Factoring in China importing 7.5 million tons of U.S. soybeans last month, if this were baseball, you could say China has 'hit for the cycle,' getting a single, a double, a triple and a home run in the same baseball game," says Kevin Roepke, USGC director of trade development in China. "The demand is clearly there. This is quite a historic moment, especially when you consider all of the challenges."
For more news and analysis from USGC, visit http://www.grains.org/news-and-events/news-room.