China Aggressively Purchasing Grains

11/18/2020

Due to a shortfall of 20 to 30 million metric tons of cereal grains in 2020 as a result of inclement weather and typhoons, China has aggressively purchased corn, wheat, barely and sorghum.

 

Following depletion of strategic reserves, China increased imports of all grains by 85 percent over the first nine months of 2020 compared to 2019 to a level of 20 million metric tons. As corn prices rise, buyers affiliated to government trading organizations are evaluating alternative grains including barley and wheat.

 

The 2020-2021 market year commencing on September 1st marked a sharp rise in orders with 17 million tons of corn booked from the U.S., Ukraine and Argentina as the major suppliers.  In addition to corn, nine million metric tons of wheat and collectively 15 million tons of barley, sorghum and other grains  will be imported. China will compete with Japan for available grain resulting in an escalation in world prices.

 

A review of U.S. corn prices reflecting the past 20-weeks demonstrated a 30 percent rise, for a Midwest egg producer adding approximately four cents per dozen to the cost of production. Similar increases prevail for broilers.

 






































































































































































































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