Porto Alegre, November 9, 2020 – The conflict of information is the most evident highlight when it comes to the Chinese market. The Chinese government does not officially disclose updated stocks or supply and demand conditions. So, governments in other countries try to project the local framework, and private companies make their local estimates. In this environment, all kinds of more or less aggressive forecasts about the Chinese market come out. In the case of corn, the purchase situation by China in the midst of the pandemic may confuse the effective reasons for this pace of imports. However, they may also be hiding a more worrying situation soon, that is, the pace of demand growth faster than the country’s production capacity. For this reason, there is an urgent need for a global consensus to be reached on China’s corn data, as stocks are estimated from 75 to 190 million by private consulting firms.
Every ten years, USDA revises its supply and demand picture for Chinese corn. In these corrections, there is always a series of increases, which are not explained in the basic mathematics of supply and demand. In the last correction, stocks jumped from 80 to 200 million tons. The difficulties of consistent information in China result in this type of correction, which has had important impacts on expectations. However, until this year, China had little participation in the international corn market, that is, the country sold little and bought much less. Therefore, the numbers hardly influenced the global market.
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