China's corn import restrictions may be just the beginning

After restricting US corn imports, Chinese government officials are likely to turn their attention to corn supplies from other regions, as well as restricting growing sorghum imports.

The US Agricultural Counsellor lowered China's corn import forecast for 2014 15 to the lowest level in four years, 2.5 million tons, down 500000 tons from previous forecasts, as China returned large quantities of US corn since November last year on the grounds that GM ingredients were found in these US corn shipments without the approval of the Chinese Ministry of Agriculture.

The Counsellor pointed out that although imported corn from Guangdong ports is about 1000 yuan / ton cheaper than domestic corn, biotech-related trade restrictions continue to restrict US corn exports to China. In fact, the counselor warned that China's corn import restrictions could extend from the United States to other countries. China's slow approval of GM crops restricts imports from the United States and could also affect Brazil and Argentina.

The counsellor is concerned that Chinese government officials may turn their attention to alternative diets such as Australian feed barley, American sorghum and Thai cassava to replace imported corn.

China's sorghum imports rose from 631000 tons in 2012 to 4.16 million tons last year, and could reach 4.3 million tons this year.

The counsellor warned that the rapid growth in sorghum imports has attracted the attention of the government. Quality inspection officials have been strengthening the quality inspection of imported sorghum shipments. Some major suppliers are reluctant to sell to China for fear of possible trade disruptions, according to Chinese importers and feed processors.

The counsellor expects China's corn ending stocks to reach a record 79.7 million tons this year, 2 million tons higher than the USDA's official forecast because of the high corn yield in 2014. Although the corn inventory at the end of this year will still be 4.5 million tons lower than the previous year, it is of higher quality, which means that the amount of corn available is likely to be equal.

In fact, the Chinese government is likely to continue to control corn imports, aimed at reducing huge stocks. At the same time, the government is unlikely to allow corn prices to fall sharply, which means that China's import demand for alternative fodder will remain strong.