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China official think tank cuts 2016/17 corn demand estimate
December 8, 2016 / 5:48 AM / a year ago

China official think tank cuts 2016/17 corn demand estimate

BEIJING, Dec 8 (Reuters) - China will consume less corn in 2016/17 than previously forecast as livestock farmers in the world’s top grain buyer give their animals more sorghum and barley and as overall demand for feed wanes, the nation’s official think tank said on Thursday.

In a daily report, the China National Grains and Oils Information Center cut its estimate for corn consumption for the season that ends September, 2017 to 197 million tonnes, down from its previous forecast of 199 million tonnes.

That would still be up 20.5 percent year-on-year, but the drop by the influential organisation will reinforce growing concerns that higher corn prices after the new government rules on trucking delayed deliveries has eroded demand.

While consumption by industrial users, mainly located in northern China, would remain the same as previously forecast at 63.4 million tonnes, usage in animal feed will be less than earlier thought at 114 million tonnes, said the think-tank.

Farmers are turning to imports of sorghum and barley, which cost less, and in the meanwhile, overall demand for animal feed is also expected to slow this year, it added.

It raised its sorghum import estimate by a 1 million tonnes to 4.5 million tonnes.

Traders earlier estimated Chinese buyers had booked at least 1 million tonnes of sorghum in November alone.

Corn futures on the Dalian Commodity Exchange have rallied 15 percent since hitting one-year lows at the end of October.

Beijing has also been giving priority to coal freight on its railways amid surging prices for the fuel as winter starts to bite, according to energy market participants.

Reporting by Hallie Gu and Dominique Patton; Writing by Josephine Mason; Editing by Joseph Radford

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