China ups US corn purchases at start of 2023 following record agricultural imports last year
- China has bought 4.39 million tonnes of US corn this year, compared to 6.36 million tonnes over the same period in 2022, according to the US data
- China has also been boosting its corn imports from Brazil to diversify its source and ensure food security following Russia’s invasion of Ukraine
China has stepped up its purchases of US corn in recent weeks after last year’s record farm trade, but analysts expect imports to slow in the coming months before the start of next planting season.
The world’s major commodity buyer began ramping up its imports of US corn in March, buying more than 2.6 million tonnes for the 2022-23 season, according to data from the US Department of Agriculture, with the majority – 2.55 million tonnes – bought since March 14.
China has bought a total of 4.39 million tonnes of US corn this year, compared to 6.36 million tonnes over the same period in 2022, according to the US data.
The recent buying spree, analysts said, is likely due to good import margins as well as the need for China to replenish its stockpile at reasonable prices.
A new US corn crop will be planted soon. The purchase will be relying on prices or trading margins and the crop conditions of US corn for the 2023-24 season
“A new US corn crop will be planted soon. The purchase will be relying on prices or trading margins and the crop conditions of US corn for the 2023-24 season,” said Lief Chiang, China grain and oilseeds analyst at Rabobank.
Despite growing trade tension between the world’s two largest economies, China remained the US’ largest agricultural export market for the second consecutive financial year in 2022 as purchases hit US$36.4 billion, according to the US Department of Agriculture’s report in January, surpassing the record levels from a year earlier. The US Department of Agriculture defines the financial year as being from October to September.
In the financial year of 2022, US corn exports to China exceeded US$4.8 billion, down from a record in 2021, but still the second-highest on record, the US agency said.
“Despite volumes falling more than 25 per cent, total value fell just 9 per cent due to higher prices and China’s need for competitively priced US corn,” the report added.
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China has also been boosting its corn imports from Brazil to diversify its source and ensure food security following Russia’s invasion of Ukraine, which is a key producer of corn.
It authorised the purchase of Brazilian corn in late November, with Anec, a Brazilian trade group representing grain exporters, recording 1.7 million tonnes of corn exports to China at the end of 2022.
During January and February, 486,500 and 70,000 tonnes, respectively, were exported, Anec said.
Rosa Wang, Shanghai-based analyst at agricultural data provider JCI China, forecasts that China may import 20 million tonnes of corn for the 2022-23 season, slightly lower than the 2021-22 season.
In the third and fourth quarters of last year, due to the high international corn prices, the pace of China’s purchases was relatively slow
“In the third and fourth quarters of last year, due to the high international corn prices, the pace of China’s purchases was relatively slow,” Wang said.
“We expect grain imports to decline in March and April.”
In 2022, China imported 20.62 million tonnes of corn, representing a year on year decrease of 27.3 per cent, according to a report published earlier this month by an expert committee under the Ministry of Agriculture and Rural Affairs, which also highlighted the volatility of international corn prices last year.
