Will China boost corn output or become a permanent importer?

FORT COLLINS: China in recent years has been notoriously absent from global corn trade, particularly when compared with its consumption rates, in its efforts to bolster food security and maintain self-sufficiency.

However, Chinese corn prices surged this year as stockpiles dwindled, forcing the country to scoop up large quantities of foreign corn, especially from the United States. China is now on the path to becoming the top importer of the yellow grain next year.

The question now is whether the Asian country plans to permanently cement itself as a top corn importer, whether the government will attempt to boost domestic production, a combination of both or none of the above.

China's recent emergence as a major corn importer comes just a few years after Beijing eliminated both the corn stockpiling scheme and minimum purchase prices, moves that aimed to curb imports by bringing domestic prices closer to global ones.

When those changes were implemented in 2016, the government had also suggested the country begin to steadily trim back corn plantings each year to relieve the massive inventories.

Planted area has fallen a little since then, but yields have risen and output remains elevated.

China's feed needs declined in late 2018 through 2019 as African swine fever swept through its hog herd.

But around April this year, the country's corn prices began to rise. Between May and September, the ministry held several reserve auctions, which were cleaned out almost every time despite the high costs.

It is not completely certain what caused the seemingly sudden and rapid drawdown of corn stocks in China, and no one really knows their exact size, either. But market participants around the world have long been skeptical about the quality of China's inventory and unusable corn could have possibly decreased inventories.