Corn imports continue to decline, domestic corn prices are expected to rise

Since February this year, there has been a directional change in the trend of corn imports, with the import volume shifting from a previous high to a continuous decline. Especially in recent months, the monthly import volume of corn has continuously hit a temporary low. The continuous decline of external increment is conducive to promoting the stability of domestic corn prices within a reasonable range, and returning supply and demand to an ideal state of tight balance. Both in terms of actual supply and market psychology, it brings certain benefits to the trend of domestic corn prices.

This year, the trend of corn imports has adjusted, and the import volume has continued to decline significantly. According to customs data, from January to October this year, China's corn imports amounted to 13.024 million tons, a year-on-year decrease of 29.9%. On a monthly basis, except for July, the import volume continued to decrease compared to the previous month, especially in August, September, and October, where the monthly import volume was less than 500000 tons for three consecutive months. Among them, the monthly import volume of corn in August and September was 381000 tons and 313000 tons respectively, hitting a new low since April 2020; The import volume of corn in October was only 251000 tons, a year-on-year decrease of 87.7%, reaching a new low since December 2019. Based on the current arrival schedule of imported corn at the port, it is expected that the import volume will continue to remain low in November and December this year, with an annual import volume of less than 15 million tons, a decrease of more than 12 million tons compared to last year's import volume.

The gap between domestic corn production and demand has narrowed, and it is expected that corn imports will continue to decrease in the future. Since 2020, China's corn imports have remained high. From January 2020 to September 2024, a total of 100 million tons of imported corn have exerted certain pressure on the rise of domestic corn prices. However, the over quota import of corn in the past five years was an active choice after considering various factors such as domestic and international markets, and has certain stage characteristics. With the continuous high yield of corn in China, the supply guarantee capacity of domestic corn continues to strengthen. The gap between corn production and demand in China has significantly narrowed, and the import demand has significantly weakened. It is expected that the import quantity will further decrease.

In the short term, it is expected that the import volume of corn will decrease to around 10 million tons by 2025. According to the Market Early Warning Expert Committee of the Ministry of Agriculture and Rural Affairs, China's corn production and demand gap will be less than 3 million tons in 2024/25, and there is no need to import a large amount of corn. The operation of the domestic corn market will mainly depend on its own supply and demand situation and reserve regulation policies. If no special events occur, it is expected that the total import volume of corn may decrease to around 10 million tons by 2025. In the medium to long term, the import volume of corn is expected to fall within the quota. With the deepening implementation of the "New Round of Action Plan for Increasing Grain Production Capacity by 100 Billion catties (2024-2030)", agricultural infrastructure will continue to improve, and the integration of good fields, varieties, methods, opportunities, and systems will be accelerated. Domestic corn production is expected to continue to increase, and the supply and demand relationship of corn will remain basically balanced while overall consumption remains stable. In this situation, in the coming period, imported corn will mainly be used to regulate the market, and the import volume of corn is expected to further decrease. According to the "China Agricultural Outlook Report (2024-2033)", it is predicted that China's corn imports will decrease to within 7 million tons by 2030.

A significant decrease in imports is beneficial for stabilizing domestic corn prices at a reasonable level. The current peak season for corn sales in the main production areas of Northeast and North China is concentrated, and a significant decrease in imports is bound to have a positive effect on boosting market confidence and stabilizing corn prices. From a psychological perspective, import volume is an important indicator of the supply-demand balance sheet, and all parties involved will reassess the market situation based on the trend of corn imports. The significant reduction in external supply will to some extent enhance people's expectations of corn supply and demand returning to a tight balance state, which is conducive to processing enterprises and traders with low inventory actively entering the market to purchase and establish inventory. From the actual impact on market supply and demand, the import volume of corn has significantly decreased, directly reducing international supply and affecting the total supply of corn in the domestic market. Continuous over quota imports for many years have had a certain degree of suppression on the rise of domestic corn prices. With a significant reduction in import quantities, the pressure of suppression will be significantly alleviated. With stable demand and a decrease in market surplus, coupled with the orderly implementation of policy based storage, the current market price of corn is expected to be in the bottom zone and is expected to steadily rebound after the Spring Festival.