China Caps Grain Imports to Stop Slide in Prices

A clamp-down on China's grain imports since last year has more to do with Chinese officials' anxiety about low grain prices than trade war posturing. Officials in China worry that low prices could undercut two of this year's goals for rural policy. Low prices could erode production incentives ahead of spring planting--resulting in a decline in grain output--and lead to a recurrence of rural poverty--which Xi Jinping claimed to have conquered 5 years ago. 

An article last week in Farmers Daily--the communist party's mouthpiece on farm issues--described how Chinese authorities are coordinating a clamp-down on grain imports with domestic market interventions to boost grain prices. All the elements in the article matched paragraph 7 in the party's "Central Document No. 1" section on agricultural supply management without referring to the document.

Farmers Daily celebrated a sharp drop in grain imports that began last summer. After tailing off during the first half of 2024, China's corn imports fell abruptly in August-December to their lowest volumes in years. The cumulative 1.58 mmt of corn China imported during August to December 2024 was just a small fraction of the 13.4 mmt imported during the same months of 2023.  

Source: analysis of Chinese Customs Administration data.

China's wheat imports also dropped last August. Wheat imports were on a healthy pace of about 1.8-to-1.9 mmt per month during February-May 2024. Then imports dropped off during the June-August marketing season for China's winter wheat harvest and dropped even lower during August-December. Cumulative wheat imports during August-December 2024 were 68 percent less than their year-earlier volume.

Source: analysis of Chinese Customs Administration data.

Soybean imports displayed a different pattern. Imports of genetically modified soybeans (used for crushing) were 104 mmt in 2024, up from 97 mmt in 2023. Imports of non-GMO soybeans (which compete directly with domestic non-GMO Chinese soybeans for use in food products) plummeted last year. Non-GMO soybean imports totaled 928,000 metric tons in 2024, down from 1.7 mmt in 2023. 

 

Preliminary data for January-February 2025 show imports of grain and soybeans combined were down 35% from their year-earlier volume in the first two months of this year. Soybean imports during January-February 2025 were up 4.4% year-on-year.

 
Farmers Daily predicted that the falling trend in wheat and corn imports will continue in the first quarter of 2025. The article cited USDA's downward revisions of its forecasts of China's grain imports over the last 3 months to support its prediction. Farmers Daily anticipates that China's grain market supply and demand will be tight, market price expectations will improve, and grain prices will continue to recover. 

Farmers Daily blamed "profit-seeking non-essential imports" for driving down Chinese grain prices and suppressing farmers' incomes. The chart below shows that Chinese corn prices dropped dramatically after the 2023 harvest. Farmers Daily claims the reduction of "non-essential" imports restored "balance" and "normal operations" to the grain market. Nevertheless, prices dropped again after the September 2024 harvest despite the clamp-down on imports suggesting an excess supply of domestic corn. Authorities may have been alarmed when the procurement price fell below RMB 2000, a level not seen in 5 years. Chinese corn prices finally turned up slightly in February 2025 as authorities took measures to sop up excess grain supplies in the domestic market after they had pared back imports. 

Weekly data from China's Administration of Food and Commodity Reserves

Prices for domestically grown soybeans have followed a broadly similar path to the corn price. The decline in soybean prices began in 2022 and the decline in price after the 2024 soybean harvest was steeper. Domestic soybeans have also seen a modest rebound since February 2025.

Weekly data from China's Administration of Food and Commodity Reserves

Farmers Daily cheered on the Chinese government's market interventions to deal with the "excessive decline in grain prices": enforcing minimum prices for rice and wheat and buying up corn and soybeans for government reserves. 

A March 7 article by China Grain Net (linked to Sinograin, China's grain reserve company) credited Sinograin's increase in prices it pays to procure corn for the broader boost in corn market prices. Sinograin procured 223,000 metric tons of corn during the final week of February and 314,000 metric tons in the first week of March (but these amounts were only half the amount targeted). A follow-up article said procurement was boosted to 410,000 metric tons in the 2nd week of March (less than half the record-high target of 973,000 metric tons set for that week). 

On March 17 the agriculture ministry reiterated a pledge made in this year's "Document No. 1" to continue implementing grain and soybean subsidy policies to keep prices "at a reasonable level," keep farmers net returns steady, and to strengthen farmers' incentives as planting proceeds during the spring season. Specific goals for policy support are to consolidate the expansion of soybean acreage in recent years and keep grain production at 700 million metric tons.