Who is the driving force behind the increase in China's corn imports?
In July this year, China's corn imports reached 86,000 tonnes, up 217% month-on-month and up 18% compared with the same period last year. In recent years, corn imports have climbed steadily, showing explosive growth since 2010, jumping from 83,000 tonnes in 2009 to 1.572 million tonnes, an increase of nearly 18 times year-on-year. In 2012 they hit a new high, reaching 5.2064 million tonnes.
Figure: China's corn import volume data from 2003 to 2013
Data source: China Customs
What factors are driving the year-on-year increase in corn imports?
First, the main reason is the continuous increase in domestic corn consumption. After more than a decade of development, domestic corn consumption reached 190 million tonnes in 2013, an increase of 53%. In 2013 China's corn output was 210 million tonnes; after deducting consumption, only 20 million tonnes of corn stocks remained. As China's third-largest grain crop, corn plays a pivotal role in grain production and is tied to China's food security, so maintaining ample stocks and meeting domestic consumption requires reliance on imports.
Figure: Comparison chart of China's corn consumption and output
Data source: China Customs
Second, China's corn output growth has slowed, and the domestic consumption gap has widened. After decades of rapid development, corn output growth has slowed in the past two years; in addition, China's urbanisation process has seen construction, roads and other development swallow up large areas of farmland, reducing the area of corn fields. Third, this year Henan, Liaoning and other main producing areas suffered severe drought, and corn in Northeast China may see a slight reduction in output.
Third, imported corn is of good quality and cheap. Because government purchasing and storage have pushed up corn prices, this year's corn purchase price is 2,300-2,400 yuan per tonne, while the average annual import price of corn in 2012 and 2013 was 323 USD per tonne, equivalent to 1,989 yuan per tonne, nearly 400 yuan per tonne cheaper than domestic corn.
Due to the issue of genetically modified corn, China has repeatedly rejected imports of GM corn from the United States, and the volume of corn imports has slowed somewhat in the past two years.
In the future, if the government relaxes restrictions on GM corn, China's corn imports will increase further.