 Chinese Market |
|
|
|
|
|
China's record wheat crop to stave off corn imports |
| Time:2008-6-19 8:18:00 From: |
HONG KONG, June 11 (Reuters) - China's bumper 2008 winter wheat crop will help stave off corn imports this year, relieving one source of concern for soaring markets, but its return as an exporter looks equally unlikely, traders said on Wednesday.
With Chicago Board of Trade (CBOT) corn prices surging 50 percent since January to hit a record of nearly $7 a bushel on Wednesday following a downgraded forecast on this year’s U.S. crop, traders are alert for news from China, the world’s second-biggest corn grower after the United States.
Traders said that a bumper wheat crop could help meet increased demand for animal feed if unfavourable weather were to cut into the country’s 2008 corn crop, which is still hostage to weather conditions ahead of its September harvest.
"I don’t think China is going to import corn because of wheat," said a senior industry official based in Shanghai. "They are still harvesting wheat, but the crop should be okay."
The China National Grain and Oils Information Centre last week upgraded its corn harvest forecast for this year by 5 million tonnes to a record 154 million tonnes, equal to nearly 20 percent of world’s corn output, although it said cold and wet weather had hindered early growth. [ID:nL04685810]
It has raised its forecast for the 2008 wheat harvest to 112.5 million tonnes, up from its previous estimate of 107.6 million. It adjusted the figure for 2007 wheat output to nearly 110 million tonnes, from 106 million.
China was once the world’s second-biggest exporter of corn, but clamped down on shipments in recent years as rising demand for meat and competition for cropland threatened its goal of maximum self-sufficiency in key resources.
Thanks to hefty supplies and export restrictions, domestic corn prices in the consuming southern city of Guangzhou <0#ASCORN-CN> are hovering at about 1,900 yuan ($275) a tonne. They stood well below U.S. corn quoted at above $420 a tonne, including costs and freight.
Traders said prices any higher than 2,000 yuan would probably prompt livestock producers to use cheaper, lower-protein feed wheat, the price of which stands below 1,600 yuan in some provinces <0#ASWHEAT-CN>.
"Corn prices in China are unlikely to rally like in the United States," said the Shanghai-based official.
CBOT wheat prices have fallen sharply from a late February peak above $13 to around $8 a bushel on Wednesday.
EXPORTS UNLIKELY
In an effort to keep food prices stable ahead of the Beijing Olympics Games in August, the state-owned Sinograin had also shipped about 10 million tonnes of corn to the south from the north following grain procurement programmes, they said.
Beijing may not issue corn export quotas this year despite prospects of a bumper 2008 harvest as record U.S. corn prices raises fears of possible shortages in the future, they said.
"The government may worry more about domestic supply. Even if they have a bumper harvest, they may not issue a huge amount of corn export quotas," said an official in Beijing. "It may issue only less than one million tonnes for Taiwan and North Korea."
Official customs data released on Wednesday showed China exported almost nil corn in May, while year-to-date shipments have slumped 97 percent to just 110,000 tonnes.
A senior trader in Shanghai agreed:: "I don’t think anything is happening for exports. They don’t want to take the risk. They have high inflation. If you export, it would drive up the domestic market."
|
|
|
|
 Related News : |
|
|
|
|
|
|
|
|
|
