China gets first corn shipment from South Africa, bolstering push to diversify away from US
- Delivery comes after Chinese buyers cancelled 562,800 tonnes of US corn orders in the last week of April
- Venturing as far as South Africa to source corn reflects the rising importance that Beijing is placing on acquiring critical grains
With China increasingly looking to friendly nations to help lower its grain reliance on the United States and war-torn Ukraine, the first shipload of South African feed corn was offloaded last week.
The noteworthy milestone was achieved by China’s largest food processor, manufacturer and trader – COFCO Group, which has for years been cultivating markets in South Africa, a fellow member of the BRICS group of emerging markets and also a participant in China’s Belt and Road Initiative.
The state-owned trader imported 53,000 metric tonnes (1.17 million pounds) of feed corn in the first batch, which will be supplied to domestic firms soon, according to Fan Zhenyu, who is in charge of the company’s international corn business.
In comments posted to COFCO’s website, Fan also said it would expand procurement sizes while exploring the use of regular bulk carriers to transport grain.
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COFCO has already signed deals with 43 South African farms – with more than 70,000 hectares (173,000 acres) of farmland – to be long-term suppliers. The company also runs a large soybean-processing plant in the country.
Last year, China imported 20.6 million tonnes of corn, most of which is used for feeding animals, and the total is equivalent to 7.4 per cent of domestic output. US supplies accounted for 72 per cent of China’s imports, according to customs data.
The proportion of US corn fell to 37.8 per cent in the first quarter of this year, but it remained the No 1 source, followed by Brazil and Ukraine.
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Why is the Chinese government so concerned about food security?
The world’s second-largest economy is seeking to shift its heavy reliance on the US and Ukraine for corn by diversifying suppliers, as escalating geopolitical conflicts and growing tensions with Washington have set off food-security alarms.
Chinese buyers cancelled 562,800 tonnes of US corn orders in the last week of April, the US Department of Agriculture warned in a corn-export report released on Thursday.
Beijing has also opened the door wider for Brazilian corn, as supplies from Ukraine fell 36 per cent last year.
In the first quarter of this year, China’s corn imports from Brazil reached 2.16 million tonnes, overtaking Japan to become Brazil’s largest corn buyer, according to a report released by International Trade Futures (IFT) on Thursday. China also accounted for 29.3 per cent of Brazil’s total corn exports during the period.
‘Over-reliance’ on seed imports highlights China’s food security conundrum
“In the second quarter, Brazil [corn] has entered a slow export season, and Ukrainian production has declined, while Chinese imports of US corn are expected to increase,” IFT estimated.
China is proactively seeking to diversify its corn suppliers from more southern world countries, and to increase domestic food production to offset global seasonality and rising corn prices caused by geopolitical conflicts.
A recent report by the Ministry of Agriculture and Rural Affairs said that the country’s corn self-sufficiency rate is expected to reach 96.6 per cent by 2032, which would reduce its annual imports to 6.85 million tonnes.
