China imported 380,000 tons of corn in August, a 14-fold year-on-year jump, as buyers stocked up on cheaper imports after domestic prices of the grain rose, data from the General Administration of Customs showed on Saturday [23 September 2017]. Imports of the grain had surged in July to 910,000 tons, the fourth highest volume on record…Full Article: The Global Times Sept 2017
- Based on China’s 2020 push to institute nationwide ethanol use in gasoline (i.e. E10 or 10% ethanol), the country would need approximately 15 million MTs of ethanol (~45 million MTs of corn). According to a corn analyst with Shanghai JC Intelligence, China may need to import up to 20 million MTs of corn per year to meet this ethanol-based demand. The analyst also noted that corn production in northeastern China is expected to decrease from 50-60 million MTs to less than 30 million MTs over the next three to five years.
- During the 2017 to 2018 market year, according to the China National Grain and Oils Information Center, Chinese corn consumption is expected to have a year-on-year increase 8.4% to 221.97 million MTs.
- In September 2017, China announced it would institute nationwide ethanol use in gasoline by 2020. The common ethanol fuel mixture, E10 (i.e. 10% ethanol), is expected to be adopted across China and will likely benefit ethanol producers including, Shandong Longlive Bio Technology (SHE:002604) and COFCO Biochemical Anhui (SHE:000930). At the time, the Chinese government had already introduced ethanol in gasoline in 11 provinces, including Guangxi, Jilin, and Liaoning.
- In early September 2017, the price of first grade corn in the Port of Jinzhou, Liaoning Province, the price of first-grade corn hit a high of CNY 1,720 (USD 260.97) per MT over worries concerning short-term supply. At the time, Chinese corn farmers noted they would delay selling their crop in anticipation of future higher prices.
- In early July 2017, according to the China National Grain and Oils Information Center, corn spot prices in Changsha (Hunan Province), Nanchang (Jiangxi Province), and Wuhan (Hubei Province) have increased CNY 30 (~USD 4.65) to CNY 1,800 (~USD 279) per MT due to flooding. Within China, corn from northern China is typically shipped to ports in southern China. Once in southern China, the corn is transported in barges along the Yangtze River to the inland provinces of Hunan, Hubei, and Sichuan. Due to high water levels on the Yangtze River, barge shipments have slowed causing prices to spike.
- From 2015 to 2016, China’s (incl. Hong Kong and Macau) corn imports decreased from 4.74 million MTs to 3.18 million MTs. In 2016, the largest corn supplier was Ukraine with 2.6 million MTs, followed by the USA and Laos at 238,157 MTs and 138,906 MTs, respectively.
- In 2016, China produced on average 2.1 million MTs of ethanol fuel annually and had a biomass energy capacity of 10 gigawatts (GW), which was below the target goal of 13 GB by 2015.
- In November 2016, corn prices in Heilongjiang Province, ranged between CNY 1,240 yuan (USD 183) per MT and CNY 1,320 yuan [USD 195] per ton, a roughly CNY 500 (USD 74) per MT decline from last year. The price decline was partly the result of China ending its corn reserve purchasing program. Consequently, grain traders noted they would delay purchases in order to see how the market reacts.
- In October 2016, a Beijing publication stated that the average corn price paid by ethanol companies in Jilin Province was CNY 1,450 (US$217.44) per MT. At the same time, the purchase price paid by ethanol companies in Kaiyuan, Liaoning Province, was CNY 1,570 [~US$233] per MT. The publication also noted that from 2007 to 2014, corn purchase price in Heilongjiang Province increased from CNY 1,380 [~US$181.32] per MT to CNY 2,200 [~US$357.42] per MT, before falling to CNY 2,000 [~US$318.35] per MT in 2015. In general, corn imports from the USA total just CNY 1,500 [~US$221.90] per MT.
- In April 2016, China’s Ministry of Agriculture announced it would increase soybean production at the expense of corn production. The Ministry of Agriculture also noted that soybean production will be promoted on farmland that has historically grown soybeans (e.g. Heilongjiang Province).
- In March 2016, China’s National Development and Reform Commission (NDRC) announced it would end the country’s corn stockpiling program in 2016. During the same month, China reportedly had approximately 250 million MTs of corn in its state reserves.
- As of 2015, China’s northeast (e.g. Heilongjiang, Liaoning, Jilin and Inner Mongolia) had approximately 160 million MTs of corn in storage, or roughly 78% of China’s total corn reserves.
- In November 2015, China announced plans to cut its corn production by 3.3 million hectares across 13 provinces/regions by the end of 2020. This decline in area will cut production by approximately 25 million MTs. According the Deputy Director of China’s Crop Production Department (under the auspices of the Ministry of Agriculture), the major corn producing regions of Liaoning, Jilin and Heilongjiang will see the largest declines in production area, while Shanxi, Shaanxi, Gansu, Guizhou and Yunnan will also be affected somewhat.
- In September 2015, China decreased its corn purchasing price for state reserves by 10.7%, marking it the first decline since price support measures would introduced in 2008.
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