ShareThisAfter several years of supplying corn to its neighbors, China has quietly started importing large amounts of the food staple in an effort to compensate for poor growing conditions and meet the rapidly changing appetites of its swelling middle class.
China's state-owned trading house COFCO Co. Ltd. has confirmed that it has bought six cargo loads of corn from the United States. That purchase came two weeks after COFCO bought two other boatloads of corn, and some analysts expect China to buy another seven loads in the next few weeks.
The purchases mark the first time in nearly four years that China has imported any corn and even then, in August, 2006, the country bought only one cargo load.
The total volume of China's purchases so far -- roughly 441 tons -- is a fraction of the U.S. corn harvest. But some analysts say more deals are likely.
"This may be the beginning of some opportunities to trade more consistently with China in the corn sphere," Tom Dorr, president of the U.S. Grains Council, which represents corn growers and other farmers, said on a conference call this past week. He said he believes as many as 15 cargo loads have been sold to the Chinese recently.
"There are a lot of things underlying this new demand but clearly the Chinese economic growth that has taken place over the last several years has created new demands by their middle class for higher-quality proteins," Dorr said.
Chinese consumers are demanding more meat, milk and eggs, he added, all of which require corn as a feedstock.
"It does seem to me that underlying all of this is a growing demand for protein that is going to result in increased need for corn," he said.
China is one of the world's largest markets for corn and once bought as much as four tons annually from the U.S. and other countries in the mid-1990s. But the country gradually became self-sufficient in corn and became a net exporter in recent years, shipping production to neighboring countries including South Korea and Japan.
A drought last year and a wet spring this year have slashed the Chinese corn crop and domestic prices have been soaring. China also does not generally grow the higher-yielding genetically-modified varieties of corn that are common in North America.
Corn's price hike and Chinese shipments come at a good time for American and Canadian corn growers, who have planted massive volumes this year. Corn is the largest crop grown in the U.S., with this year's harvest expected to be a record 13.4 billion bushels.
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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