An article on the feedtrade.com.cn web site discusses the prospects for importing large amounts of corn this year. According to customs statistics, 1.6 million metric tons (mmt) of corn was imported during 2010, mostly for feed manufacturing.
When the first import contracts were signed, the domestic price of corn was 1850 yuan/mt and the cost of imported corn was 1750 yuan/mt, a profit of 100 yuan. Now, "due to national subsidies, inflation and other influences," the domestic price is up to 2050 yuan/mu and the landed price of imported corn has gone up too.
The article reports that some in China are calling for a waiver of the 13-percent value added tax on imports to reduce their cost.
The article also reports that the Chinese and Argentine Ministries of Agriculture reached an agreement for China to import 5.5 mmt of corn from Argentina, apparently over 2 years. Some kind of agreement was signed by Chinese inspection and quarantine authorities to allow the Argentine corn into the country as long as it is among the 11 approved genetically-modified corn types. This agreement allows China to compare price and quality of corn from multiple countries and pick the best. The article says COFCO had to return a cargo of U.S. corn because it contained an unapproved genetically modified variety.
[update: Today, Reuters reports that Chinese authorities are denying any deal with Argentina to import corn.]
The article says appreciation of the Chinese currency can offset the rise in imported corn prices. Since April, the price of U.S. corn has gone up 82% but the Chinese yuan has appreciated just 3.5%. A faster appreciation would benefit Chinese importers.