WASHINGTON (USGC) – After 30 years of at or near double-digit economic growth, China’s capacity to continue increasing domestic corn and feed grain production is believed to be below projected consumption growth, and that means demand potential. Recent trade disruptions affecting the export of U.S. corn and distiller’s dried grains exports to China have driven Chinese corn prices sharply above world market levels.
But U.S. competitors such as Brazil also face barriers in entering this market. The U.S. Grain Council’s Brazil Representative Alfredo Navarro last week reported frustration that that the phytosanitary agreement signed November 2013 between Brazil and China has not yet led to significant Brazilian corn exports to China.
The total for 2014 is only 2,900 metric tons, all exported prior to the agreement. At the time the phytosanitary agreement was signed, the Brazilian Ministry of Agriculture estimated that Chinese corn imports could soon reach 10 million tons per year.
Longer term, USDA and the Food and Agriculture Organization estimate China could import 19.6 million tons of corn by 2022, and some in Brazil speculate actual imports could be substantially higher.
Chinese imports of U.S. corn are currently blocked by China’s continuing failure to approve MIR 162, a biotech event approved in all other major markets, including the United States, Brazil and Argentina. Brazilian sources believe, however, that Chinese approval is just a matter of time, and that approval is likely to be timed to take advantage of market lows.
To hear more about the struggle for Chinese market access, click the audio player above this story.