Many recent forecasts have predicted that China’s corn stocks (an important crop for feeding livestock) would be significantly decreased in the upcoming months, resulting in a greater need for corn importation, much to the benefit of leading grain export nations such as the United States. However, the UN Food and Agriculture Organization has significantly revised previous estimates of China’s 2014-2015 corn stock by an increase of 15% to 95.4m tonnes. Many agricultural traders have been gearing up for an increase in China’s demand for grain and corn, so the FAO’s revision comes as a shock to many who were poised to capitalize on the situation. Some Chinese exporters claim that even the the 95.4m estimate is too low, and that the projected need for corn in China will be far below anyone had previously expected.
The unexpected revisions to China’s corn stock will have many U.S. agriculture exporters rethinking their original expectations for exportation. The exact impact this change will have on the health of the U.S. agricultural industry and overall amount of income from agricultural exports remains to be seen, but one can expect that this projection change will have a noticeable effect given the unprecedented magnitude of change from the original Chinese corn stock estimate.
http://www.ft.com/intl/cms/s/0/e7163cd2-d951-11e4-8ed9-00144feab7de.html#axzz3WUB2qKDj
3 Comments
I wonder what the reason is for such a dramatic increase in Chinese corn stock. Could it be an indication of the modernization of the Chinese economy where we could see this increase become permanent.
Errors in initial reports? Good weather? Lower meat consumption in China? Surely a bit of digging would uncover more info!
I doubt that this kind of under-performance will remain permanent. The US has certainly benefited from technological advancement to the agriculture industry — something like only 2% of the U.S. produce the entire country’s agriculture. If China has not already picked up on these advancements, they surely will in the near future.
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