BEIJING: China’s imports of corn and corn substitutes, including barley, sorghum and distillers’ grain (DDGS) hit a record high in July as feed mills took advantage of cheap overseas prices to replace expensive domestic grain.
The aggressive purchases have prompted government authorities to tighten the way they regulate imports of corn substitutes, which are currently exempt from quota restrictions, and could slow down shipments to the world’s top buyer, analysts said.
China’s commerce ministry will require importers of barley, cassava, DDGS and sorghum to register details of their purchases under a new system that will come into effect from Sept. 1.
“The introduction of the system will limit imports. Buyers have to register for permits first before they purchase,” said Zhang Yan, an analyst with Shanghai JC Intelligence Co Ltd (JCI).
“Authorities have strengthened monitoring over imports of these products,” said Zhang.
China’s imports of DDGS, a by-product of corn-based ethanol, rose 67 percent on the year to a record 1.1 million tonnes, data from the General Administration of Customs showed on Friday.. The previous record was 959,935 tonnes in June.
China imported almost all of that from the United States, the world’s largest exporter.
Imports of barley surged 68 percent on the year to 1.28 million tonnes, largely from France and Australia. Chinese feed mills have stepped up imports of the grain for animal feed production since 2013. Previously, the grain was mostly used to make beer.
Imports of sorghum also jumped 183 percent on the year to 1.11 million tonnes, official customs data showed.
China’s corn imports in July rose around tenfold from a year-ago period to a record 1.11 million tonnes, of which 938,344 tonnes came from Ukraine under a loan-for-grains deal.
Chinese buyers earlier in the year ordered more than 2 million tonnes of corn from the Black Sea region after buyers were allocated this year’s import quotas.
Beijing’s stockpile system has pushed domestic corn prices nearly 50 percent higher than global prices, with soaring imports amid a record-high level of state reserves possibly forcing Beijing to cut state support prices this year and move to free domestic corn prices as early as 2017, analysts said.
JCI estimated China’s corn and corn substitutes imports would drop by more than 30 percent to 20 million tonnes in 2015/16 from a record 30 million tonnes in the current marketing year.
