Opinion

Chinese Corn Prices Set to Drop in 2021/22

Maize (Corn)
China
Published Sep 30, 2021
Chinese corn prices are expected to fall during the 2021/22 season, due to increased production of feed grains in 2022 and expectations of a bumper harvest from the new crop. According to the China National Grain and Oils Information Center (CNGOIC), corn prices could reach record low levels between December and the Chinese Spring Festival, the expected peak period when farmers market the new crop. Chinese corn futures prices have dipped by 13% from record-high levels in May.

Supply of feed grains set to increase

China has increased its purchases of various feed grains to make up for the gap in the domestic corn supply. Imports of both corn and wheat surged to record high levels in 2020. Chinese corn imports have grown considerably in recent years, rising by 135% in value between 2019 and 2020 and by 39% over the past five years. China is the third-largest global importer of corn, purchasing USD 2.49 billion in 2020, and a key market for major suppliers such as the US and Ukraine. According to CNGOIC, Chinese corn imports are forecast to reach 20 million tonnes in the 2021/22 marketing year, falling from 29 million tonnes in 2020/21. Chinese wheat imports rose to USD 2.26 billion in 2020, rising 151% compared to the year before. The value of the country’s wheat imports has improved by 21% over the past five years.



According to CNGOIC, Chinese sorghum imports are forecast to reach 10 million tonnes, increasing from 8.5 million in the previous year. Chinese sorghum imports have been rising recently, rising by 501% between 2019 and 2020. Chinese barley imports for 2021/22 are set to rise to 12 million tonnes, from 11.4 million tonnes in 2020/21. China is the leading global importer of barley, with a market share of 26.9%. According to CNGOIC data, China was likely to import 200K tonnes of dried distillers’ grains (DDGs) in 2021/22, similar to this year.



According to CNGOIC, feed grain demand could increase stably in the new year, as prices could continue dropping while alternative feed ingredients to substitute corn and soybean meal would continue to be promoted. In 2021, Chinese hog prices decreased as production rebounded and farmers rushed to send heavy pigs to slaughter. According to CNGOIC, China is forecast to consume 36 million tonnes of wheat and 34 million tonnes of rice in feed. Wheat and rice used in feed are expected to remain high, helping to curb corn prices. Chinese feed producers and livestock farmers secured millions of tonnes of wheat in 2020 to replace corn as corn prices reached record highs. Chinese stocks of feed wheat and rice remain plentiful. However, due to rising demand, grain imports will remain high in the upcoming year.

Sources:

By clicking “Accept Cookies,” I agree to provide cookies for statistical and personalized preference purposes. To learn more about our cookies, please read our Privacy Policy.