COMMODITIES 2025: Asia's corn market prepares for volatility in 2025 amid US-China trade tensions

This is part of the COMMODITIES 2025 series where our reporters bring to you key themes that will drive commodities markets in 2025.

Asia's corn market is set for a dynamic year in 2025, influenced by a potential US-China trade war, changing consumption trends, and evolving trading relationships, likely disrupting the stable pricing trend established in the second half of 2024.

In 2024, destination corn prices saw relatively rangebound movement, with Platts corn CFR Northeast Asia assessment fluctuating between $230-$252/mt in Q2-Q4, significantly narrower than the previous year's range of $237.5-$335.25/mt. Overall, corn prices in 2024 were lower than in 2023, with the July 9 assessment hitting a 45-month low at $230/mt, due to improving weather in the US and excellent corn stock forecasts in Brazil and the US.

China's diversification strategy evolved

Asia's corn trade dynamics will likely experience greater volatility in 2025 due to geopolitical tensions following the re-election of former US President Donald Trump, who has announced his intention to impose tariffs on China.

Key exporters such as the US, Brazil, and Argentina will continue to supply the Asian region, but competition among these players is expected to remain stiff.

China, one of the largest corn importers globally, will likely play a significant role in shaping Asia's corn trade flows.

The approval of Argentine corn exports to China, along with Brazil's exportable surplus, can diversify supply and reduce reliance on US corn if US-China trade tensions reignite.

In 2024, it reduced its corn imports by almost half while increasing domestic corn production by over 6 million mt year on year to 295 million mt, according to the National Bureau of Statistics.

For the marketing year 2024-25 (October-September), China's corn imports are forecast at 10 million mt, down 57.4% from the previous year, according to S&P Global Commodity Insight data.

Domestic corn prices in China continue to decline amid a record corn crop and ample stocks, making imports less attractive.

"Corn import margins have fallen to their lowest levels since 2022," Kun Peng, research and analysis associate director at Commodity Insights said.

However, China has room to grow and is advancing steadily in the field of GMO corn seed usage with the Chinese Ministry of Agriculture and Rural Affairs having approved and registered 36 genetically modified varieties, the sector is likely to grow exponentially.

Meanwhile, the Chinese government continues to support its domestic markets, having ordered an informal halt in September on all corn imports to bolster local farmers' sales prices.

"China is limiting the amount of corn that [feed millers] can import, [the cut] would likely be 50%, and we have already seen a significant drop in imports this year that was slightly offset by barley and sorghum imports. At the end of the day, we need to see what kind of stimulus package China will have to counter the tariffs," said a Singapore-based feed mill source.

China has set its corn import tariff quota for 2025 at 7.2 million mt.

Changing consumer habits

With corn a staple in Asia, particularly for animal feed, the region's expanding middle class is likely to result in increasing demand for protein-rich diets that drive consumption of poultry, pork, and fish.

Countries such as Vietnam and Indonesia are expected to lead this growth with the USDA forecasting Vietnam's feed demand in 2025 to reach 27 million mt, with 20.9 million mt for animal feed and 6.1 million mt for aquaculture.

However, China, the largest consumer of animal feed, is experiencing a negative trend. A declining population and slowing economy have been and will continue to drag on animal protein consumption.

Hog margins have deteriorated, and the industry is set for further consolidation, as the top 20 swine companies account for less than 30% of production, according to Platts Principal Agricultural Economist Vladimir Zinkovski at the 7th Singapore Agri and Food Forum on Oct. 10.

Meanwhile, other Asian countries, such as South Korea and Malaysia, are likely to see rangebound feed grain imports, Zinkovski added.

Corn demand growth from biofuels market

Asia is currently the fastest-growing market in biofuels production and exports globally driven by government policies and export markets for feedstocks and will likely boost corn demand in the region.

In 2024, India achieved its 15% ethanol blending goal and set a target of 20% for 2025. Previously, India was a corn exporter, contributing 2% to the world share in 2022, according to USDA figures.

However, due to the high corn demand for starch, cattle feed, and ethanol distilleries, India has become a net importer of corn.

Since February 2024, India has consistently imported more corn than it exported, according to Ministry of Commerce customs data.

From February to September 2024, corn imports totaled over 840,000 mt, compared to 284,000 mt of exports during the same period.