China's 2015/16 corn production estimate revised downward

The relevant agency has revised its forecast for China's 2015/16 corn production downward to 229 million tons, 3 million tons lower than the earlier forecast, due to drought affecting some production areas in Northeast China.

However, even after the downward revision, corn production still set a record high, up 6.2% from the previous year's output. A bumper corn harvest means the central government will face more pressure in reducing its huge corn stockpile and restricting imports.

The relevant agency said that ample domestic corn supply, combined with huge stockpiles, will push domestic prices down and constrain imports. Recently the Chinese government introduced a new licensing policy aimed at controlling the surging imports of corn substitutes. In July this year, China's imports of corn and corn by-products (including corn distillers dried grains) hit a record high, as feed processors used cheap imported supply to replace high-priced domestic corn. A decline in imports will help domestic corn demand rise to 179.5 million tons in 2015/16. The surge in imports of corn substitutes caused domestic corn consumption in 2014/15 to fall to 170 million tons, the first decline in many years.