Prices of corn in China keep rising this year

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     Porto Alegre, September 21, 2020 – Prices in China keep rising this year. The Chinese domestic market seems to have suffered a disruption in its distribution structure and forced the government to make almost 20 interventions with its buffer stocks to meet domestic demand. However, due to logistics, domestic consumers have opted for imports as an alternative to reduce delays in withdrawing corn from the government and obtaining supplies in the medium term. Even with the Chinese crop reaching the market, there are issues of internal logistics and a very strong appeal for new and better quality corn.

     Prices in China jumped to 2.45 Yuan per kilogram, approximately USD 340/ton, that is, an extremely expensive commodity in the local market. However, it is a protected and government-controlled market, not only in the purchase of corn directly from growers but also in the sale to consumers and import decisions. For this reason, there are import quotas, most of which headed for state-owned companies. Last week, the Chinese government decided to leave the 2021 import quota for corn and wheat unchanged from previous years.

– The quota for wheat imports in 2021 was set at 9.636 million tons, 90% of which will go to state-owned companies, according to China’s National Development and Reform Commission (NDRC).

– The import quota for corn in 2021 was set at 7.2 million tons, of which 60% will go to state-owned companies.

– China has a 95% self-sufficiency target for its consumption of rice, corn, and wheat, but allows a certain volume of imports through the TRQ system, under which importers can buy specified volumes at rates as low as 1%, compared to 65% without the quotas.

     Agência SAFRAS Latam

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