The top importer of the crop is turning to Brazil
Major US corn buyer China has been reducing imports from the country due to weak demand and cheaper supplies from Brazil, Bloomberg reported on Friday.
Chinese buyers have reportedly canceled 832,000 tons of US corn orders in the past three weeks, while ramping up purchases from fellow BRICS member Brazil, which is projected to pass the US as the top exporter this year.
According to the report, citing traders, US corn is now less competitive, with supplies from Brazil around $30 a ton cheaper for delivery in the third quarter. Weak domestic demand for corn as animal feed was also listed among the reasons behind the cancelations.
“Demand for corn is really poor,” Wang Xiaoyang, a senior analyst with Sinolink Futures in one of the top grain-growing provinces, Henan, told Bloomberg. “Feed producers are using a lot of wheat to replace corn as prices keep falling.”
The report indicated that wheat prices are around 180 yuan ($26) a ton cheaper than corn in Henan and may decline further.
Meanwhile, traders and analysts pointed out that struggling hog farmers are seeking to cut feed costs, “so replacing corn with wheat is a natural choice.”
Customs data shows that Chinese corn imports hit a record of over 28 million tons in 2021, before falling to about 21 million tons last year.
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