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In recent years, due to factors such as abundant supply in the global corn market, China's corn imports have remained high, exceeding the import quota for four consecutive years. In 2023, it reached the second highest historical level of 27.13 million tons, an increase of 31.6% from the previous year. The large-scale import of low-priced international corn has been causing increasing impact on the stable operation of domestic corn prices, both in terms of actual supply and market psychology. It is worth noting that as we enter 2024, the trend of corn imports begins to show directional changes, especially in recent months where corn imports have significantly decreased month on month and year on year. In the future, they may even return to within the quota, which is undoubtedly a significant positive for the purchase price of domestic new season corn that is about to be listed in large quantities. Once the external increment subsides, it will be conducive to promoting the stability of domestic corn prices within a reasonable range and returning supply and demand to an ideal state of tight balance.
1、 Since the beginning of this year, corn imports have continued to decline significantly
According to customs data, the cumulative import volume of corn in China from January to August this year was 12.558 million tons, a year-on-year decrease of 15.7%. Among them, the monthly import volume from January to April continued to decline significantly compared to the previous month, with import volumes in February, March, and April decreasing by 27.6%, 34.3%, and 31% respectively; After May, the monthly import volume for four consecutive months was less than 1.1 million tons, with a cumulative import volume of 3.479 million tons from May to August, a year-on-year decrease of 45.4%. Especially in August, the import volume of corn was only 429000 tons, a year-on-year decrease of 63.9%, reaching a new low since April 2020. Based on the current arrival schedule of imported corn at the port, it is expected that the import volume will continue to remain low from September to December this year, with an annual import volume of less than 16 million tons, a decrease of more than 11 million tons from last year.
2、 The decrease in imports is conducive to the stability of domestic new season corn prices
What is the impact of the significant decrease in imports on the domestic corn purchase and sales market in the later stage, as the new season corn in the main production areas of Northeast and North China is being harvested and launched on a large scale? On the one hand, in terms of supply quantity, the decrease in imports has to some extent offset the increase in domestic production, which is more conducive to promoting the balance of supply and demand. According to the Market Early Warning Expert Committee of the Ministry of Agriculture and Rural Affairs, due to the increase in corn area and good growth, China's corn will have another bumper harvest this year, with an increase of more than 8 million tons in production. The increase and decrease in corn production and import volume have resulted in a decrease of about 3 million tons in the annual market supply compared to last year, which is conducive to alleviating the downward pressure on prices caused by increased production. On the other hand, from the perspective of market psychology, a significant decrease in imports will be beneficial for improving expectations from all parties. Since last year, domestic grain prices have generally fallen, with a significant reason being the increase in import volume and the decrease in price. Especially when the import scale exceeds the tariff quota, it has had a great impact on the psychological expectations of the main body of the industrial chain. They are worried that exceeding the quota for imports will become the norm, so they dare not collect and store more. From the trend of grain imports in recent months, it can be seen that the import quotas for the three major staple foods are expected to be maintained, truly playing the role of a "firewall". Taking August of this year as an example, the cost of transporting US corn outside the quota (with a 65% tariff) to southern ports in China after arrival at the port is 1.67 yuan per kilogram, which will lose its price advantage compared to the 1.22 yuan per kilogram of domestic corn and make it difficult to create an impact on the domestic market.
3、 In the future, China's corn imports are expected to remain within the quota
Since 2020, China's corn import volume has exceeded the tariff quota year after year. There are reasons for the temporary shortage of corn production and demand, but there are also considerations for implementing the China US economic and trade agreement to expand imports. This is an active choice after considering various factors such as domestic and foreign markets, and has certain phased characteristics. With the continuous growth of domestic corn production capacity in recent years, especially the acceleration of the large-scale increase in corn yield, the supply guarantee capability of domestic corn has been continuously enhanced, and the gap between corn production and demand in China has significantly narrowed, with import demand significantly weakened. According to the Market Early Warning Expert Committee of the Ministry of Agriculture and Rural Affairs, China's corn production and demand gap will be less than 3 million tons in 2024/25, and there is no need to import a large amount of corn. The operation of the domestic corn market will mainly depend on its own supply and demand situation and reserve regulation policies. In the medium to long term, with the deepening implementation of the "New Round of Action Plan for Increasing Grain Production Capacity by 100 Billion catties (2024-2030)", agricultural infrastructure will continue to improve, and the integration and promotion of good fields, varieties, methods, opportunities, and systems will be accelerated. The domestic corn yield and total output are expected to continue to increase. With stable and increasing consumption, the supply and demand relationship of corn will remain basically balanced. In this situation, in the coming period, imported corn will mainly be used to adjust the market, and the import quantity will also be maintained within the quota. The impact on the domestic market will continue to weaken