What’s new: China imported almost 30% more wheat, rice and corn in the first 11 months of 2020 as a rebound in the livestock sector drove up demand for feed and as foreign prices held significantly below domestic costs.
China imported 99.72 million tons of grain from January to November, an increase of 29.6% from the same period last year, data from China Customs shows.
The price of imported wheat was 333 yuan ($51) a ton lower than for domestic wheat, and the spread for corn was as much as 609 yuan a ton, according to official data.
The background: To protect the domestic market, China has long used quotas to limit imports of wheat, corn and rice. The National Development and Reform Commission, China’s state planner, set this year’s corn import quota at 7.2 million tons, the same as last year’s. A 1% tariff applies to imports under the quota, while imports above the quota are subject to a 65% duty.
China’s government is discussing permits for millions of tons of additional corn imports over the next year, Reuters reported in October citing three industry sources, amid a surge in animal feed demand and after storms and drought damage tightened domestic supplies.
COFCO Group, China’s largest foodstuffs producer and grain trader, projected that corn imports could more than double to 17 million tons in 2020-21 from a year earlier on prospects for a smaller domestic harvest and a recovery in demand for hog feed.
At the third China International Import Expo held in Shanghai last month, COFCO signed purchase deals worth more than $10 billion with global partners, an increase of 20% from last year’s expo.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
Related: China’s Corn Imports Seen Doubling as Crop Shrinks and Demand Rises
