In response to recent cancellations of Ukrainian corn orders, China is reportedly considering the cancellation of corn shipments from Europe, as part of efforts to alleviate supply pressure on the domestic market. The cancellations of Ukrainian-origin animal feed corn shipments, totaling several hundred thousand metric tons for April/May deliveries, have prompted China to explore measures to manage its corn imports and support domestic corn prices, which have been under pressure due to surging imports and weakened demand from the domestic feed industry.
China’s domestic corn prices have been hovering near over three-year lows, prompting the potential cancellations to help stabilize prices ahead of the spring planting season. This move aligns with China’s goal to maintain stability in the corn market, following a record corn crop of 288.84 million tons last year and the aim to further raise production. To manage corn imports, China has set a quota at 7.2 million tons for 2024, after which higher duties are imposed on cargoes.
In addition to import management, efforts are being made to regulate the processing of imported corn into animal feed within bonded zones, where some companies can avoid higher tariffs. Local authorities have urged traders and processors to limit the amount of overseas corn delivered to the bonded zones, reflecting a broader effort to regulate the import and processing of corn to align with domestic supply and demand dynamics.
The cancellations of import orders and the focus on managing corn imports come amidst a 16% increase in China’s corn imports in the first two months of 2024, with the Agriculture Ministry raising its forecast for imports during the 2023/24 season to 20 million tons. These developments underscore China’s proactive approach to balancing domestic corn supply and import levels, while also reflecting the broader impact of global trade dynamics on China’s agricultural import decisions.