Has the Boom of China's Grain Imports Peaked?

It's hard to overestimate China's impact on global grain markets. For decades, a large population, rapid economic growth, and limited domestic production have led to a sharp increase in imports of grains and oilseeds.

 

In the 2023-24 marketing year, China holds the top position in imports of wheat, corn, sorghum, barley, and soybeans, importing 111.5 million tons of soybeans (63% of the global volume). Since 2000, the combined import of corn, wheat, and soybeans has increased by 982%—from 13.5 million tons to 146.1 million tons.

 

However, a population decline for the first time since the early 1960s and an economic downturn affecting consumers' purchasing power make China's long-term demand for imported grain uncertain.

According to the China Agricultural Monitoring and Early-warning System (CAMES), from 2024 to 2033, grain imports to China may decrease by 30%. This significantly differs from USDA forecasts, which anticipate a slight decrease in wheat imports, a minor increase in corn and rice imports, and a 33% growth in soybean imports.

 

Even the more modest USDA forecasts indicate a significant shift compared to the past 20 years. While most analysts predict a long-term decline in China's population, the state of its economy is less predictable and may cause short-term concerns. The population decrease itself could lead to reduced demand for grains and oilseeds.

 

China also aims to become more self-sufficient. According to CAMES, over the next decade, grain production in the country will increase by 11%, while consumption will grow by only 2.3%. Efforts to boost domestic production, including the approval of genetically modified corn cultivation, are expected to reduce dependence on imports.

 

It's worth noting that with 20% of the world's population, China holds nearly 70% of global corn reserves, 60% of rice, and 51% of wheat. These significant reserves, along with its position as a leading grain importer and desire to increase production, reflect the country's focus on food security.

 

While grain imports to China are expected to decrease, it's unlikely that a country so focused on food security will sharply reduce consumption by the significant percentages predicted by CAMES. A more probable scenario is gradual growth in domestic production, slight increases in imports, and continued accumulation of grain reserves.