Ethanol Blog

U.S., Brazil Vie for Growth in China's Feed Demand

Cheryl Anderson
By  Cheryl Anderson , DTN Staff Reporter

China's lower projections capacity for domestic corn and feed grain production could spell opportunities for growth in demand for U.S. grain and dried distillers grains with solubles, as well as resolution of recent trade disruptions between the two countries.

China has experienced 30 years of double-digit economics growth; however, its capacity for growth in corn and feed grains production is likely below growth in consumption, according to an article by the U.S. Grains Council (http://bit.ly/…).

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The situation is even more dire considering that the trade disruptions with the U.S. have driven China's domestic corn prices considerably higher than world price levels. The trade disruptions originated from China's refusal to accept the MIR 162 biotech corn trait and its rejections and demands on U.S. exports of corn and DDGS containing the trait.

The U.S. is not the only country facing difficulty with exports to China. Brazil's corn exports to China have not reached the levels expected after a phytosanitary agreement was signed between the two countries in 2013. When the agreement was signed, Brazil expected corn exports to China would reach 10 million tons per year; however, the total for 2014 is only 2,900 metric tons. The U.S. Department of Agriculture and the Food and Agriculture Organization estimate China may potentially import as much as 19.6 million tons of corn by 2022.

Brazil and the U.S. will likely compete for a share of the Chinese market, but Brazil faces the same challenge as the U.S. with China dragging its feet on approving MIR 162. The MIR 162 biotech trait is approved by most major markets, including the three top corn exporters: the U.S., Brazil and Argentina.

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.

(ES)

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