The International Grains Council sharply boosted its estimate of corn consumption in China, pointing to government measures expected to drive up industrial use of the grain 14 percent during 2017/18. The shift in Chinese consumption will affect grain stockpiles worldwide, said the IGC in its monthly Grain Market Report, with the first reduction in five years in the grain “carryover” at the end of the marketing year.
Agrimoney pinned the increase in corn consumption on Chinese policies to drive up demand for corn, including a target of nationwide use by 2020 of a 10-percent mix of ethanol into gasoline. “This implies a large increase in ethanol demand from current levels,” said Agrimoney. Like the United States, corn is expected to be the major feedstock for ethanol makers.
In its report, the IGC estimated Chinese corn consumption at 68 million tonnes this marketing year, up 8.2 million tonnes, or 14 percent, from 2016/17. The IGC said “government measures are stimulating demand in order to curb stocks.” Second to the United States as the world’s largest corn producer, China began 2017/18 with a corn stockpile nearly equal to a six months’ supply. By contrast, the U.S. stockpile was a two-month supply.