China Reduces Corn Imports Due to Trade Tensions and New Tariffs
Chinese importers are intensifying efforts to diversify their sources of corn supply to mitigate risks arising from escalating trade tensions. The reasons for these changes include the new tariff policy of the U.S. administration, as well as other factors affecting the market. Chinese farmers are also making significant efforts to boost domestic production to ensure stable supplies, noted a senior industry analyst during a press conference.
This is reported by AgroReview
According to data from the General Administration of Customs of China, in the first two months of the current year, corn imports totaled 180,000 tons, which is a 97.1% decrease compared to the same period last year. This significant reduction in import volumes is linked to several factors, including the narrowing price gap between imported and domestic corn, as well as the necessity for traders to diversify supplies due to the threat of new tariffs from the U.S.
Trade Relations Between the U.S. and China
The decline in imports aligns with forecasts from the Ministry of Agriculture and Rural Affairs of China made in January. These forecasts indicated a substantial decrease in corn imports for the 2024/25 marketing year. As analyst Xi Yinshen points out, starting this year, the price advantage of imported corn has effectively disappeared, with its cost at southern ports in China becoming equal to or even higher than domestic prices.
Domestic Production and Agricultural Development
An additional factor influencing the reduction in imports has been the deterioration of trade relations between the U.S. and China. On February 1, the U.S. government announced the imposition of an additional 10% tariff on goods imported from China, and on February 4, China responded by implementing similar tariffs on certain American goods. On March 3, the U.S. introduced a new package of tariffs, prompting a new wave of corresponding measures from China, including 10-15% tariffs on U.S. agricultural products, including corn and soybeans.
In response to these events, China is ramping up its corn production and implementing new agricultural technologies. In particular, varieties of corn with high protein content are being developed to reduce dependence on soybean imports. In 2023, Brazil surpassed the U.S. as the main supplier of corn to China, and analysts predict that the loss of American supplies could be fully compensated by imports from other countries. It is expected that by 2025, China’s demand for imported corn will decrease by approximately 50%.
The further development of the grain and oilseed market in Ukraine and the Black Sea region will be discussed at the 23rd International BLACK SEA GRAIN.KYIV Conference, which will take place on April 24 in Kyiv. Everyone is invited to join strategic discussions and networking with industry leaders!