China keeps 2020-21 corn import forecast unchanged despite surge in advance sales

New Delhi — Chinese Agriculture Outlook Committee, or CAOC, has kept the country's corn production and import outlook for 2020-21 marketing year (October-September) unchanged in its latest survey even as various indicators are pointing toward greater imports into the country.

"At present, the corn harvest is basically over. Although the Northeast region was hit by a typhoon in the early stage, the actual output and quality were not significantly affected," CAOC said in the report.

China's corn output is seen at 264.71 million mt in 2020-21 as compared to 260.77 million mt in 2019-20, while the import is forecast at 7 million mt in 2020-21, down from 7.6 million mt in 2019-20, according to CAOC data.

However, corn prices in the domestic market have rallied since February, and in October, the national price averaged around $362/mt, the highest since August 2015, indicating supply tightness in the market.

While China officially maintains the import outlook at 7 million mt in 2020-21, the US corn sales to China paints a different picture.

The outstanding US corn sales to China stood at 8.56 million mt in 2020-21 as of Oct. 29, according to the US Department of Agriculture, or USDA.

China is expected to import 13 million mt of corn in 2020-21, up from 7.6 million mt in 2019-20, according to the USDA's Foreign Agricultural Service, or FAS, report released on Nov. 10.

"The surge in corn imports is partly based on China Customs Statistics and US Grain Inspections data through early November, which indicate that imports will far exceed the tariff-rate quota (TRQ) level of 7.2 million tons in calendar year 2020. There have been no public statements that would indicate that additional quota has been allocated by the National Development Reform Commission, the authority governing the TRQs," the FAS report said.

China also kept the 2020-21 consumption forecast unchanged at 288.17 million mt as against 278.30 million mt in 2019-20.