China 2012 corn, rice imports at record high

Tuesday, 22 January 2013 00:00 - - {{hitsCtrl.values.hits}}

BEIJING (Reuters): China, the world’s top consumer of grains, imported a record high amount of corn and rice in 2012, while its wheat imports surged to a eight-year high, driven by strong domestic demand and cheap international prices during the first half of the year.

China will increasingly depend on overseas markets for its grain supplies as domestic production falls behind growing demand following the country’s rapid urbanisation, Chinese agriculture officials say.

Imports of corn in 2012 rose 197% to 5.2 million tonnes while wheat imports rose 195% on year to 3.69 million tonnes and rice imports were up 305% to 2.34 million tonnes, according to figures of the General Administration of Customs.

China became a net importer of rice, wheat and corn in 2012, for the second year in a row despite a record domestic harvest.

“The rising corn and wheat imports are due to robust meat demand from animal feed production, as China’s wheat imports consist largely the feed-grade wheat from Australia,” an analyst with the China National Grain and Oils Information Centre (CNGOIC),said.

Tight domestic corn stocks also prompted the state stock-piler to import corn from the US.

“The government may resume imports overseas as there is still a need for filling reserves, but right now, imports are expensive,” said one industry analyst who declined to be identified. In order to protect farmers, Beijing had set a minimum purchase prices for grains which was higher than international prices in the first half of 2012, and this encouraged imports.

Imports declined after international grain prices surged after drought hit major exporters, including the US in the second half of 2012. Traders said the higher prices would also reduce China’s grain imports this year.

“Over the last few years, China has been very active buyers of feed wheat out of Australia,” commodities strategist at the Commonwealth Bank of Australia Luke Mathews said.

“We believe China will largely be self sufficient in wheat production,” said Mathews.

China, the world’s top consumer and producer of wheat, has resumed imports of milling wheat from the US and Canada, following a surge of domestic flour prices while domestic wheat quality was damaged by excessive rains last year.

China’s wheat imports in 2012/13 were estimated at three million tonnes by the US Department of Agriculture.

Tighter rice import quotas for state-owned companies would also reduce low-quality rice imports from Vietnam, analysts said.

A majority of rice imports in 2012 were from Vietnam, which were about 20% lower than domestic rice prices and traders stepped up imports of the cheap rice to blend with domestic rice.