China to grow 5.5pc less corn this cycle as acreage drops

BEIJING: Chinese farmers will plant less corn this season, resulting in the smallest crop in six years, as the world's top grains producer seeks to whittle down its huge glut of the grain and boost production of soybeans, according to a Reuters poll.

During the spring planting season that starts in April, growers will cut their corn acreage for a second straight year to 35.2 million hectares, according to the median of estimates from four responses to the poll. That is 4.1 percent lower than the 36.7 million hectares that China's National Bureau of Statistics (NBS) reported planted during the last crop year.

The lower acreage will result in corn output dropping to 207.5 million tonnes in the 2017/18 crop year that ends in September. That would be 5.5 percent lower than the 219.6 million tonnes produced in the 2016/17 season, according to the NBS, and the lowest since the 2012 season.

At the same time, China's soybean output will edge higher to 13.5 million tonnes on 7.6 million hectares for this crop year, according to the survey. The output would be 2.9 percent higher than the 13.1 million tonnes produced last year, according to data from the China National Grain and Oils Information Center (CNGOIC)

The shift toward rising soybean output and falling corn production reflects Beijing's stated goal of reducing corn growing to cut its bloated stockpiles.

China is sitting on close to 250 million tonnes of corn, equal to more than a year of consumption - a legacy of its almost decade-long stockpiling system. The glut prompted Beijing to cut corn planting areas and raising soybean planting in a five-year government plan issued last year.

The Reuters survey results were in line with an NBS plantings poll released on Monday.

The NBS said planned corn acreage will drop 4 percent, while soybean acreage will climb 8.1 percent.

NBS did not give estimates for output in 2017/18.

Analysts at four companies responded to the Reuters survey on corn output and acreage, including JCI Intelligence Co. Ltd, Shengda Futures Co. Ltd, COFCO Futures, and Shanghai Zhongqi Futures.

For the soybean survey, Beijing Orient Agri-business Consultants, JCI, COFCO and Zhongqi responded.