Extreme weather can reduce the corn crop in China

Corn production in China may be significantly lower this year, but this information has not yet affected prices.

Extreme weather – from heat to floods – has significantly worsened the prospects for the corn harvest in China. However, traders are not yet paying attention to this problem, given the large stocks and weak demand for the grain. However, if the situation does not improve and the government manages to boost economic development, China will have to increase corn imports.

In 2023, China harvested a record 289 mln tons of corn, but in 2024, the harvest may decrease by 7% (or 5-20 mln tons), which will be the biggest drop since 2000, when production decreased by 17%.

Harvesting will end in November, and the results will be known then, but it is already clear that the market balance will not deteriorate much even in the event of such a shortage.

At the end of September, local prices rose slightly, but still remain at a 4-year low. The record harvests of recent years have saturated the market, and the economic slowdown has reduced demand from the livestock and food industries. It remains to be seen how the government’s new stimulus program will change the situation.

This year’s grain imports to China are lower than in the previous years, and the authorities expect further decline. While in MY 2023/24 it reached 19.5 mln tonnes, in the current season it will not exceed 13 mln tonnes. This will have a negative impact on American farmers, who provide most of the Chinese imports.

It is not yet clear whether China will have enough of its own reserves to meet the growth in demand if the economic development program is successful. In the future, climate change may pose problems for future harvests, which will put pressure on the government to stimulate supply.

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Tags: China, corn, crop forecast