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News and analysis on the global poultry
and animal feed industries.
on September 14, 2009

China experiences severe drought

Feed grains production is projected to fall.

China, the second-largest corn producing country, is suffering from severe drought conditions in corn producing regions. As a result, China's feed grains production is projected to fall, minimizing their competitiveness in export markets and allowing speculation about the likelihood of imports.

The official corn production number for the 2009-10 crop year from China National Grain and Oils Information Center's September report was 165.5 million metric tons (6.5 billion bushels), down approximately 1 million metric tons (3.9 million bushels) from August.

USDA's World Agricultural Supply and Demand Estimates released August 12, projected China's corn production at 162.5 million metric tons (6.4 billion bushels).

According to Cary Sifferath, U.S. Grains Council senior director in China, Chinese corn is currently priced too high to compete in export markets. China's corn prices are isolated from the rest of the world due to absence of imports or exports, pushing prices higher than the world average.

China exported 5.27 million metric tons (207.5 million bushels) of corn during the 2006-07 crop year. Since then, there have only been minimal corn exports.

Based on China's expected drop in corn production, it is unlikely that significant quantities of corn will be exported during the 2009-10 crop year. Whether China will import corn is anybody's guess, according to Sifferath, but the U.S. will be the likely origin if the time comes.

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