China corn imports spike in July as mainland boosts stockpiles
China’s corn imports rose in July for the third month to hit a six-month high, as the state stockpiler and commercial traders in the world’s second-largest consumer took advantage of cheap prices in the second quarter to bolster their stocks.
However, the recent surge in U.S. corn prices has dampened China’s interest in the grain, and import volumes are expected to fall in the coming months.
China imported 721,516 tonnes of the feed grain in July, its highest since January’s 751,138 tonnes -- which analysts said was the highest in decades.
All the shipments that arrived in July were bought in the first half of the year or even last year, before the United States’ worst drought in 56 years drove corn prices on the Chicago Board of Trade prices to a record high this month.
July’s imports took total shipments in the first seven months of the year to 3.12 million tonnes, a 15-fold leap from a year ago. The bulk of the shipments was bought by the Chinese government to fill its state reserves.
Wheat imports in July jumped 133 percent to 251,474 tonnes, while imports in the Jan-July period totalled 2.4 million tonnes.
Analysts expect corn and wheat imports to soften in the next few months.
“Imports have no more price advantage over domestic supplies, so buyers are not interested in signing new deals,” said Ma Wenfeng, an analyst with Beijing Orient Agri-business Consultant Co. Ltd.
“There are sufficient rains this year which will benefit the domestic corn harvest.”
The Chinese government plans to release its old corn stocks to free up room for the new harvest, but the volume has not been finalised, analysts said.
The release, coupled with expectations of weak demand from industry processors, has kept the domestic corn price about 13 percent lower than U.S. prices, traders said.