China's corn production reached 189.2 million metric tons in the harvest that began in September, 6.7% more than in 2010, according to a survey of growers in the seven main producing regions carried out by SGS SA.
But even with these numbers, say experts, China will still need to rely on imports due to ever-increasing animal feed demand that exceeds domestic supplies. Imports in the marketing year that began in October may jump to 5 million metric tons from 1 million metric tons. “It’s an amazing crop, but demand is just too strong,” said Dan Cekander, the director of research at Newedge USA LLC. “Everybody has been projecting a record crop, and yet domestic prices are historically high, and the Chinese government just bought U.S. corn.”
Experts are predicting that China may need to import as much as 7 million metric tons of corn and 4 million metric tons of lower-quality wheat in 2012 to feed its hog, poultry and dairy herds. “China’s record harvest still doesn’t equate to a surplus because the government has to replenish depleted inventories,” said Troy Lust, a senior risk manager for commercial grain at INTL FCStone Inc. “The one thing that could derail the Chinese economy is food insecurity, and they will do whatever is needed.”