China expects a reduction in corn and wheat imports

21-07-2021 | |
Photo: Henk Riswick
Photo: Henk Riswick

According to a USDA GAIN report, China expects a reduction in corn and wheat imports, while barley imports are increased as feed mills shift to substitute more sorghum with barley.

Corn and wheat forecast

Corn production for MY2021/22 is forecast at 272 MMT, up by 11.3 MMT from last year due to higher planting area leading to high yields. The increased acreage is attributed to a mix of high prices and government policies encouraging or mandating the planting of additional corn acreage.

MY2021/22 wheat imports are forecast at 8 MMT, 2 MMT lower than USDA estimates. Reduced wheat imports are attributed to increased wheat production and improved seeds. On April 20, MARA stated that winter wheat area grew by 200,000 hectares. Besides upscaled production, rise in grain prices and shipping costs have contributed to reduced importation.

Sorghum and barley forecast

Feed demand for sorghum is currently weak. Feed grain sorghum consumption for MY2021/22 is forecast at 7.9 MMT, 2.6 MMT lower than the USDA forecast, as cheaper barley is expected to displace it in feed rations – increasing barley imports. For barley, the production forecast for MY2021/22 is lowered by 40,000 tons as some barley area has been planted to corn. Barley imports are increased to 10.5 MMT.

China feed production: January to May 2021

According to China Feed Industry Association, the feed production from January to May 2021 has been highest for pigs due to the observed recovery from ASF.

Impact of ASF on feed use

Following the outbreaks of ASF from 2018 to 2020, MARA stated that the recovery of the pig industry has not reached the pre-African Swine Fever levels seen in 2017. As reported earlier, in late 2020 a resurgence of ASF reduced China’s breeding herd. Due to fear of ASF and high feed costs, it is reported that some producers are delaying restocking. Which is negatively impacting feed use and importation of feed grains.

Influence of policy on the projected feed grain usage

China is working on its policies in an effort to manage prices, grain planting and storage levels.

  • On April 21, MARA published details of the Corn/Soybean Meal Reduction and Substitution Technology Plan for pig and poultry Feed. On May 10, the National Development and Reform Commission published ‘Management Measures for Central Budget Special Investment on Storage Facilities for Grains and other Key Agricultural Products’.
  • On May 19, the Chinese government revised the Interim Management Measures regarding Import Tariff Quota on Agricultural Products with the intention of stopping the illegal processing of imported corn into feed for the domestic market.
  • On May 25, the ‘Reform Action Plan’ was issued to control prices of grain commodities.

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Matthew Wedzerai Freelance journalist