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As stocks soar, China reducing corn acreage in 2016
Jul. 2, 2015
China plans to cut corn acreage in 2016 and switch to other crops, the country’s agriculture minister said, as Beijing comes under pressure to reduce huge stocks of the grain.
China will instead promote the growing of beans, other coarse grains and forage grass where conditions are suitable, Agriculture Minister Han Changfu told a meeting of agriculture officials from major growing areas in the northeast.
The minister also said that more corn for silage would be grown for animal feed.
Four provinces in China’s northeast, including Heilongjiang and Jilin, produce about 40 percent of the country’s total corn output and would be the main areas targeted for reduction.
“We have to fully realise the importance and urgency in pushing forward the adjustment,” said Han, who did not say how much the acreage would be reduced by.
Due to deteriorating soil and water resources, China will no longer chase bumper grain harvests and instead make safer food a priority and boost imports as it bids to tackle rural environmental problems, government officials have said.
“Growing more silage corn is the country’s long-term strategy in favour of developing the animal husbandry industry,” said Li Qiang, chief analyst at Shanghai JC Intelligence Co. Ltd.
“But the move will not ease massive domestic corn stocks in the short term, particularly this year with another bumper harvest expected,” said Li.
Beijing’s grain stockpile scheme, aimed at supporting rural incomes, has artificially supported domestic corn prices, making them more than 30 percent higher than global prices and triggering cheap overseas imports of corn and corn substitutes.
The high prices have encouraged farmers to continue to expand corn acreage this year, with output expected to hit a record.
Analysts expect Beijing will be left with more than 120 million tonnes of corn estimated at more than eight months of consumption ahead of the domestic harvest in October, as weekly state corn sales have been hurt by poor demand and cheap imports.
Source: Reuters
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