China’s record corn-buying spree — a cornerstone of its trade deal with the US — might be running out of steam, with risks growing that imports by the top buyer would fall short of US official estimates.
The domestic harvest season is looming and China is expecting a bumper crop after farmers sharply boosted corn planting this year.
That is already starting to weigh on Chinese corn prices, narrowing the gap with overseas prices and hurting the attractiveness of imports, traders and analysts said.
China’s corn purchases in 2021-2022 would probably miss the US Department of Agriculture’s prediction of 26 million tonnes, StoneX Group Inc senior Asia commodity analyst Darin Friedrichs said.
That forecast “is pretty aggressive and I don’t think we’ll see it.” he said.
The nation’s agricultural imports, especially from the US, have been closely watched by investors and businesses tracking the progress of the trade deal.
Prices across a variety of agricultural products have soared in the past year because of Chinese demand for crops to feed its expanding hog herd, stoking concern about food inflation.
Corn in Chicago jumped to an eight-year high in May.
China has imported about 23 million tonnes in the 2020-2021 marketing year, close to the US Department of Agriculture’s forecast of 26 million tonnes.
The department kept its official forecasts unchanged for 2021-2022, while the US Foreign Agricultural Service said imports would likely be 20 million tonnes.
Up until last year, the Asian nation was never a huge buyer of US corn, but its supply deficit has widened after years of reducing state corn stockpiles and as its hog herd recovers from a devastating African swine fever outbreak.
The purchases also help China meet its commitments made under the US trade deal.
High corn prices have spurred Chinese farmers to switch away from soybean planting in the northeast, so there should be increased corn production this year, Friedrichs said.
Additionally, there are problems with China’s wheat quality due to bad weather. While that wheat cannot be used for food, it can be used for animal feed, further reducing corn demand.
“The market is bifurcated — China’s diet is becoming more Western and that creates a supply deficit for high-quality wheat,” he said. “China will likely import relatively large amounts of wheat this year to help supplement the stocks of high-quality wheat.”
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
RSS