(Agrimoney) – Chinese officials, who have curbed imports on US corn through a clampdown on biotech tainting, may be turning their sights to other origins too, as well as to the country’s soaring buy-ins of sorghum.
US Department of Agriculture foreign staff revised down by 500,000 tonnes to a four-year low of 2.5m tonnes their forecast for Chinese corn imports in 2014-15, citing the refusals of cargos from the US over claims of containing a genetically-modified variety approved in Washington but not Beijing.
While imported corn is some 1,000 yuan-a-tonne cheaper than domestic supplies, as measured in the port of Guangdong, “biotechnology related trade restrictions continue to disrupt trade”, the USDA’s Beijing bureau said.
Indeed, the bureau warned of the potential spread of the Chinese curbs from US supplies to other origins.
“China’s slow biotechnology approval process has restricted imports from the United States and may impact Brazil and Argentina.”
‘Attracted government attention’
And the bureau flagged concerns that Chinese officials may turn their sights on some of the alternative feed grains that feed mills have turned to to replace imported corn, with Australian feed barley, US sorghum and Thai cassava among popular alternatives.
Chinese imports of sorghum soared from 631,000 tonnes in 2012-13 to 4.16m tonnes last season, and are expected to hit 4.3m tonnes in 2014-15.
“The rapid increase in sorghum imports has attracted government attention,” the bureau werned.
“Quarantine and inspection officials have reportedly been instructed to strengthen quarantine inspection on sorghum imports.
“According to Chinese importers and feed mills, some major suppliers are now reluctant to sell to China due to concerns about possible trade disruption.”
‘Putting pressure on imports’
The comments come amid mounting ideas on Chinese corn inventories, with analysis group Cngrain.com reportedly this week estimating the stockpile ending this season at more than 120m tonnes, equivalent to more than half a year’s consumption.
The USDA bureau pegged inventories at a record 79.7m tonnes, 2m tonnes above the department’s official estimate, helped by a 2014 harvest which, while 4.5m tonnes lower than last year, is of higher quality, meaning the “amount of useable corn will likely be similar”.
Indeed, China’s government “is expected to continue putting pressure on corn imports as it looks for ways to draw down large and expensive domestic stocks,” the bureau said.
“At the same time, the government is unlikely to allow corn prices to fall enough to allow the market to clear, sustaining strong import demand for alternative feed ingredients.”
