Source: Ukragroconsult (Ukraine)
Chinese corn production could be significantly lower this year, but this information has not yet had an impact on prices.
Extreme weather conditions – from heat waves to flooding – have significantly worsened the outlook for the Chinese corn crop. However, with substantial stocks and weak demand for corn, traders are not yet paying attention to this problem. However, if the situation does not improve and the government succeeds in boosting economic development, China will be forced to increase corn imports.
China harvested a record 289 million tons of corn in 2023, but the 2024 crop could fall by 7% (or 5-20 million tons), which would be the biggest drop since 2000, when production fell by 17%.
The harvest will be completed in November and the results will be known then, but it is already clear that the market balance will not deteriorate significantly even in the event of such a decline.
At the end of September, local prices rose slightly, but are still at a four-year low. The bumper harvests of recent years have saturated the market, and the weakening economy has reduced demand from the livestock and food industries. It remains to be seen how the government’s new economic stimulus program will change the situation.
China’s grain imports are lower this year than in previous years and the authorities expect them to fall further. While they reached 19.5 million tons in the 2023/24 marketing year, they will not exceed 13 million tons this season. This will have a negative impact on US farmers, who supply the majority of Chinese imports.
It remains to be seen whether China will have enough of its own stocks to meet rising demand if the economic stimulus program is successful. Climate change could pose challenges for future harvests and put pressure on the government to increase supply.