China’s eventual world leadership in corn imports will lead to significant changes in the grain market.
In 2014, the US Department of Agriculture predicted that by 2020 China will come out on top in the world in corn purchases.
In second place will be Mexico, and Japan will move from first place to third.
China’s share in world corn trade will rise to 40%. The main supplier of culture to the country will be the United States, but the volume of purchases from Ukraine, Argentina and Brazil will increase significantly.
In 2014, China imported 5 million tons of corn. According to forecasts, the size of imports by 2020 should grow to 16 million tons.
The year 2020 is coming to an end, and it can be stated that analysts’ forecasts made 6 years ago have come true.
Indeed, China could become the world’s largest cultural importer.
The country’s government for 2021 may increase the corn import quota at minimum tariffs.
In September, the standard was set at 7.2 million tonnes.
Taking into account the fact that the demand for animal feed is growing, and the drought and storm destroyed part of the crops in the country, it can be increased to 20 million tons.
Quotas allow importers to avoid paying customs duties, which are about 65%.
An increase in the quota can provoke a rise in prices for crops and grain in general, experts say.
So far, China ranks second in imports after Mexico, which imports 18.3 million tons.
If China takes the lead in this market, it could lead to changes in the grain market, because producers around the world will plant more corn to meet the increased demand.
This has already happened in the soybean market: when in the 90s the Celestial Empire began to import crops, farmers in Argentina, Brazil and the United States began to multiply the crops for it.
In total, China consumes 280 million tons of corn per year. For the most part, this need is covered by domestic production, and so far the import quota has not been chosen by Chinese importers.
But, according to analytical agencies, China has already ordered 12 million tons from the United States and 5 million tons from other countries, including Ukraine.
Today Ukraine is the fourth largest player in the corn export market after the USA, Brazil and Argentina.
The supplies from Ukraine go mainly to Egypt, China, the EU and Southeast Asia.
According to experts, Ukraine will export 32 million tons of corn this season, the USA — 47 million tons, Brazil — 39 million tons, Argentina — 34.5 million tons .
For comparison, Russia is expected to export 3.9 million tons (7% less than last year).
Russian exporters shipped a record amount in 2017/18. — 5.7 million tons.
Perhaps an increase in Chinese imports will have a positive effect on the Russian export market as well.
It is necessary to look ahead: according to the same 2014 forecasts, China’s corn imports by 2023/24. will grow to at least 22 million tons due to increased production and consumption of meat.
