Chinese sources have told U.S. Grains Council President and CEO Thomas Dorr their state corn reserves are 10-12 million metric tons less than previously thought for the 2011/2012 crop year. After reviewing the figures last week in China, Dorr said, I believe it is possible that China will purchase another 2-3 million tons of corn prior to the end of the 2010/2011 crop year. It appears Chinese buyers would ideally like up to 7-million tons but realize present global inventories may not accommodate this added demand.
The economic growth in China, and throughout Asia, is placing stronger than anticipated demands on livestock, poultry and dairy supplies. As a result, last year China made the first significant purchase of U.S. corn since 1995, buying around 1.5 million metric tons. Dorr believes it is important for both countries to develop a system that adequately signals demand, which, in turn, convinces U.S. producers to increase production to meet the new demand.
One critical component of developing this relationship will be China’s ability to work with U.S. suppliers to provide an accurate reading of production estimates and carryover stocks. Dorr says, the U.S.-China relationship is critical and the Council looks forward to future opportunities to solidify this relationship.