In a decision that is being heralded as "a new era", Shanghai JC Intelligence Co's chairman Hanver Li announced that China intends to import as much as 15 million tons of corn by 2015. The nation, who has not imported a significant amount since 1996, sites cultural changes such as higher incomes and a larger demand for milk, meat, and eggs, as the reason for this policy change.
BlogginsStocks.com expands on the possibilities this announcement opens for the US and for the world grain market:
The logical place for China to turn to for its corn purchasing would be the U.S. We have an oversupply this year. Exports to China will help stabilize prices, not only for this year, but for the next five years.Further Reading:
Currently, about 20% of the U.S. corn crop goes into the production of ethanol. If we combine China's buying and the growing need to use corn for ethanol, we can look for higher prices. So far, corn has rallied 8.4% since April 27 when the United States Department of Agriculture (USDA) announced China's first purchases.
Sf Gate: Corn May Gain on Speculation China's Import Demand Will Surge
Bloomberg on The New Era
