Mounting criticism of levels of soybean imports from America, amid a Beijing-Washington trade spat, threatens China's appetite for imports of US corn and distillers' grains.
China is, according to media reports, witnessing "waves of criticism" at imports of American soybeans "dominating the China market", a briefing from US foreign staff based in Guangzhou said.
"As a result the government has become cautious and sensitive about grain imports such as corn and distillers' grains," the report said.
The level of Beijing's reticence may be gauged by success in applications for Chinese import licences for distillers' grains, which the US grains industry is promoting.
Currently, distillers' grains are shipped without registration.
"If repeated attempts to obtain Ministry of Agriculture regulation for US distillers' grains prove futile, that could point to Chinese government intent to curb imports," the US attaches said.
Import needs
Their report comes at a difficult time for Beijing-Washington trade relations, strained after US President Barack Obama last month placed a tariff on tyre imports from China.
China, the world's biggest soybean importer, has been forced by drought in South America to source most of its beans from America this year.
Many commentators believe it is also poised to restart imports of corn, of which the US is the biggest exporter, following drought damage to domestic crops.
Meanwhile, the US is attempting to promote trade in distillers' dried grains with solubles, a byproduct of corn-based ethanol manufacture which is used as a cost-effective animal feed.
Shipping factor
Although Chinese imports of US distillers' grains jumped from 101 tonnes to 6,000 tonnes last year, it remains a small market, and way behind the big two of Mexico and Canada.
|
Main buyers of US distillers' grains, 2008
1: Mexico, 1.19m tonnes
2: Canada, 771,791 tonnes
3: Japan, 198,014 tonnes
4: Taiwan, 189,451 tonnes
5: South Korea, 184,723 tonnes
Source: US attache report |
Trade is also being held by the type of transport, in containers, rather than the bulk shipping, as with soybeans or wheat, which would "slash" transport costs and improve the competitiveness of US distillers' grains, the report said.
Domestic consumption of the commodity is limited by China's curbs on using corn for non-food or feed uses.
Guangzhou, formerly Canton, is the capital of Guangdong province, responsible for 78% of China's imports of US distillers' grains.