Wednesday, August 14, 2013

Desperately Seeking Corn Suppliers

Chinese authorities appear to have accepted the fact that their country will be a corn importer for the foreseeable future. Now they're nervous about their reliance on the U.S. for nearly all of their corn imports, and they are trying to find competitors for the Americans.

According to Rural Commercial News, Argentina's agriculture minister announced that a 60,000 metric ton shipment of corn from his country has been approved for import by Chinese authorities. The corn reportedly has been shipped to inland areas of China where it will be used for pig and poultry feed. According to "news," China is expected to buy 500,000 metric tons of Argentine corn this year.

Grain analyst Chen Changxiu describes the prospect of Argentine shipments as signaling the end of American dominance of the Chinese corn import business. The article says Argentina is the second-largest corn exporter and the chief competitor of the United States. It says Argentina gives China an alternative to U.S. corn. Mr. Chen says Argentine corn is cheaper than U.S. corn for Chinese importers and poses a challenge to the dominance of U.S. exporters. In 2012, China agreed to accept corn from Ukraine. China's quarantine authorities reportedly have also approved Thailand, Peru, and Laos as sources of corn imports used for processing.

Another analyst claims the effect of imported corn on the domestic market is relatively minor since the tariff rate quota system limits imports to 7.2 million metric tons.

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