Farmers dry corn in the sun in Nantong, Jiangsu province. China's corn production this year is expected to surge to 182.5 million tons, up 3 percent from last year. Xu Ruiping / for China Daily

BEIJING - This year's corn crop is expected to reach a record high of more than 180 million tons, said a senior expert from a State think tank.

But fast-growing domestic demand means that the bigger harvest is unlikely to offset the surging corn imports, which will probably show a "mild and stable increase" over the next few years, said Xu Xiaoqing, the director of the Department for Rural Economic Development at the Development Research Center of the State Council, a top State think tank.

"Despite natural disasters this year, it is still quite possible to achieve an increased corn yield. Weather permitting, this year's corn harvest could even beat expectations," Xu said in an exclusive interview with China Daily.

"But domestic demand for corn in animal feed and for processing is also growing rapidly. China will have a tight balance of corn in the domestic market for the next few years," he added.

According to a monthly forecast released in August by Grain.gov.cn, a website operated by the China National Grain and Oils Information Center, corn production this year is expected to surge to 182.5 million tons, up 3 percent from last year.

China uses 105 million tons of corn a year for animal feed, with another 60 million to 70 million tons used in the processing sector for such products as starch, citric acid and ethanol.

Increased meat consumption in China has generated extra demand for corn as animal feed. Also, industrial demand for starch and ethanol is increasing, putting upward pressure on corn imports.

According to the General Administration of Customs, corn imports in 2010 reached a record high of 1.57 million tons, a staggering increase of 17.6 times that of the previous year.

The surge in imports has prompted worries about food supplies.

But the imports accounted for less than 1 percent of the nation's bulk domestic production, and the percentage is likely to remain very small, posing no challenge to the China's corn self-sufficiency, Xu said.

However, the tight balance means growing reliance on the world food market, which will leave China vulnerable to international speculation and price fluctuations, said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd.

"In the domestic market, the tight balance for corn is also likely to fan hoarding and speculation, which will cause sharp price fluctuations, especially at a time when the market is awash with liquidity," he said.

In July, China ordered 533,400 tons of corn from the United States, exceeding the US estimate of the country's corn imports for the whole year. China ordered another 55,900 tons of US corn in August.

China Daily

(China Daily 09/14/2011 page21)