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China Aims to Close Corn Supply Gap Within Decade, But Challenges Remain

 China is taking steps to bridge the gap between its domestic corn production and consumption, aiming to achieve self-sufficiency within the next decade, according to Li Shengjun, director of the monitoring and prediction department at China's national grain and oils information center (CNGOIC).

Speaking at the International Grains Conference, Shengjun highlighted the government's focus on bolstering domestic corn production to meet rising demand, driven by the country's rapid economic growth and increasing consumption of animal protein. This news was first reported by S&P Global Commodity Insights earlier this week.

"Looking forward to the next ten years, China's maize production and consumption will maintain a rapid growth, with gross rate of production exceeding the gross rate of consumption, and the gap will gradually decrease," Shengjun stated.

The USDA projects China's corn production for the 2024-25 marketing year at 292 million metric tons (MT), a 1.1% increase from the previous year. However, domestic demand is expected to rise faster, reaching 313 million MT, an increase of around 2%. This widening gap is expected to continue in the coming marketing year.

"For the coming marketing year, the USDA projections point at a further widening of China's supply and demand gap, with consumption increasing faster than production," S&P Global Commodity Insights reports.

While acknowledging the existing gap, Shengjun expressed confidence that market forces will eventually lead to a balance between supply and demand. He emphasized the government's commitment to ensuring food security, particularly for corn, which is a vital component of the country's food system.

"There's no plan just yet, however, under the influence of markets, the supply and demand will reach a balance," Shengjun said.

China currently relies heavily on imports to meet its corn needs, with the USDA projecting imports for the 2024-25 marketing year at 23 million MT, unchanged from the previous year. Brazil has become a key supplier for China's corn imports, accounting for 71% of imports during the year ending May 2024.

"Between May 2023 and May 2024, China's imported a total of 23.7 million mt of corn, out of which 16.8 million mt or roughly 71% were supplied by Brazil alone," S&P Global Commodities points out.

Shengjun acknowledged the potential impact of China's efforts on the global corn market, given its position as the world's largest corn importer. However, he expressed confidence in China's ability to achieve its goals.

"All the countries, all the markets, where there's a gap or deficit, it's only temporary," Shengjun said, adding that "prices will influence everything."