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Nation signs deal to import corn from Argentina

By Xiao Zhou | China Daily | Updated: 2012-02-17 07:42

BEIJING - China has signed an agreement to import corn from Argentina, according to a statement posted by Argentina's agriculture ministry on Thursday on its website.

The agreement will provide China with an alternative corn supplier other than the United States, the statement said.

Given its strong demand, China will become "a significant importer" in the coming years, and its corn imports in 2012 are expected to reach 3 million tons, according to the statement.

Analysts said the agreement could pave the way for investment in the corn production and processing industries on both sides.

"More Chinese companies may consider investing in Argentina's corn industry," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd.

The deal might also mean lower corn imports prices, Ma added.

China was largely self-sufficient in corn until 2010, when corn imports surged 17-fold year-on-year to 1.57 million tons, according to data from the General Administration of Customs.

In 2011, imports rose 11 percent to 1.75 million tons, official data show.

Corn consumption growth was being driven by accelerating urbanization, analysts said. At the end of last year, the urban population outstripped that in rural areas for the first time, accounting for 51.27 percent of the total, according to the National Bureau of Statistics.

Urban residents tend to consume more meat and oil than those living in rural areas. As a result, more corn will be used as animal feed to produce meat, said Hu Bingchuan, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences.

Corn imports are expected to continue increasing. China's corn imports are likely to jump to 7 million tons in the 2012-2013 marketing year from 4 million tons in 2011-2012, Rabobank International said on Dec 5.

But some analysts doubted whether the increase would be that big. "China had a bumper corn harvest in 2011. It will offset some imports," Ma said.

He added that price differentials between the international and domestic markets were too small to push up imports much.

"I reckon corn imports this year will remain largely unchanged from last year," Ma said.

The nation's 2011 corn harvest hit a record 192 million tons, up 8.2 percent year-on-year.

Total grain output increased 4.5 percent to 571 million tons in 2011, official data show.

China Daily

 

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