China’s corn-supply concerns grow after three typhoons flatten crops in main northeastern grain region
- Many farmers started shifting from corn to soybeans last year at the central government’s behest, to reduce reliance on imports from the United States amid trade war
- Last year, China had a corn-supply deficit of 17 million tonnes, and analysts say that figure could expand to 25 million tonnes by next year
Concerns are mounting over the sufficiency of China’s grain supply after three typhoons hit the country’s main corn-growing region in quick succession over the past two weeks, flattening crops and pushing corn prices to their highest level in five years.
The full extent of the storms’ impact on this year’s corn harvest is not yet known, but some analysts say the natural disasters in the northeastern corn region could lead to a drop in output in Heilongjiang and Jilin – two major corn-producing provinces.
In an attempt to abate losses, the provincial government of Heilongjiang announced at the weekend that it had launched “a battle for disaster relief and self-rescue” for corn farmers, issuing them detailed instructions on how to salvage corn crops that had been flattened by heavy wind and rainfall.
The expected drop in corn output comes at a time when the price of corn, a key ingredient in animal feed, has already risen sharply across China. This is partly because many farmers shifted from corn to soybean crops last year and earlier this year after the central government encouraged soybean growth to reduce the nation’s reliance on imports amid the trade war with the United States.
The already tight balance between supply and demand for corn is increasingly tilting towards a supply shortage following the typhoons. Corn prices increased by nearly 30 per cent from the start of the year to 2,355 yuan (US$345) per tonne at the beginning of August, before falling slightly to 2,274 yuan per tonne at the end of the month, according to data from the National Bureau of Statistics. And the inflation in corn prices, in turn, has led to price rises in wheat, another key grain, as animal-feed producers try to replace corn with wheat as a raw material.