Will China continue to buy Ukrainian corn this year?
news of the sale last week of a large consignment of corn from the US to China sparked concern about the possible reduction of demand for Ukrainian corn, which in recent years has almost replaced the American market of China.
Last week, USDA has recorded the sale of 756 thousand tons of corn to China, while rumors circulated about the sale of 1.2 million tonnes under the signed the first trade agreement under which China pledged to almost double its import of agricultural products from the United States.
On this news, corn futures in Chicago rose 1.5% to 138 $/t
Earlier that the US was the main supplier of corn to China in 2013 exported in this direction 3.6 million tonnes of corn. However, after China granted the advantage of Ukrainian corn, corn exports from the U.S. to China decreased by 450 thousand tons per year.
imported by China in 2019 7 million tons of corn, the share of Ukrainian grain amounted to 3.84 million tonnes, Therefore, a strong China to buy corn in the United States will reduce the domestic demand for grain, especially harvest 2020
January-13 March Ukraine exported to China of 1.1 million tonnes of maize, particularly in March to 262 thousand tons.
the Purchase prices for the Ukrainian corn in the port increased because of the shortage of offerings on the background they need to perform the traders of the March contracts.
In the current season Ukraine has almost fulfilled the plan for the export of corn, having 22 million tonnes from a projected 29-30 mln t. However, the increase in acreage under maize in Ukraine and the United States next season will increase competition in the global market.
Pre-USDA forecasts corn production at 400 million tonnes, as American farmers give up planting soybeans in favor of corn, although the fall in oil prices and demand for ethanol to adjust the forecasts.
Experts believe that this year China will continue to buy Ukrainian corn, while exporting grain from the United States will engage in public companies that need to replenish sold out in previous years state reserves.
