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China's ag imports see bumper finish to strong year

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China’s ag imports certainly enjoyed ag strong 2020.

 

One of the takeaways from General Administration of Customs data on Monday was that they showed marked increases in imports for all six ags tracked.

 

OK, that was only to be expected for sorghum, for which Chinese import volumes were undermined in particular in 2019 by the country’s trade war with the US.

 

But it was also the case for wheat, for which imports soared more than 140% to 8.38m tonnes, a record on the dataset.

 

Even imports of barley grew by 36%, despite China’s megatariffs on imports from key origin Australia.

 

Strong finish

As for corn, for which Chinese imports are particularly market sensitive, imports rose by 136%, also to a record high.

 

If it may be some surprise that the pace of import growth did not exceed that of wheat, remember that corn purchases did not start really taking off until later in 2020.

 

In fact, in the October-to-December period, they quintupled, to 4.62m tonnes, amid a demand for feed, spurred by the growing hog herd, which spilled over into soaring late-year demand for other grains too.

 

Even barley imports, at 3.43m tonnes, soared 258% in the October-to-December period, despite the dearth of Australian origin supplies.

 

Quota secrecy

Will the trend extend into 2021?

 

It would be easier to judge if China was less mysterious about its needs and ambitions.

 

As the US Department of Agriculture noted last week, China has in corn far exceeded a tariff rate quota of 7.5m tonnes “despite making no formal announcement by its National Development and Reform Commission that additional quotas have been allocated.

 

This “despite a recent World Trade Organization case indicating the need for more tariff rate quota transparency”.

 

But one signal that corn imports may remain strong is the huge premium afforded Chinese prices - trading on the Dalian exchange at more than twice Chicago values, and offering scope for import arbitrage.

 

Another is that China’s pork imports, which doubled to 4.39m tonnes over 2020 as a whole, also put in a strong finish, soaring more than 160% year on year in the fourth quarter.

 

However buoyant China’s hog herd recovery is proving, it hasn’t reached the stage yet of cutting reliance on foreign supplies, so offering plenty of scope for further domestic expansion, and enhanced feed needs, to come.

 

Chinese ag imports, 2020
Commodity Import volumes (m tonnes)
Year-on-year change for full 2020
Year-on-year change, October-to-December quarter
Barley 8.08 +36% +258%
Corn 11.3 +136% +502%
Pork 4.39 +108% +163%
Sorghum 4.81 +479% +629%
Sugar 5.27 +56% +253%
Wheat 8.38 +140% +188%
Sources: GASC, Agrimoney

 

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