China to stockpile record 80 million tonnes of corn

China will stockpile a record 80 million tonnes of corn this year, up from the 69 million tonnes it bought for stockpiling in 2013/2014, a senior trader at top grain buyer COFCO said on Thursday. The huge stocks will bring China's corn inventory to more than 150 million tonnes by the end of the 2014/15 stockpiling period, Zhu Yongsheng, deputy general manager of COFCO's risk control and bio energy department, told a conference in Shanghai.
China's state corn stocks have ballooned in recent years, with the government offering farmers high prices for their crop but unable to offload the grain at prices some 30 percent above the international market.
With imports of overseas corn restricted by quotas, Chinese appetite for corn substitutes has surged as processors seek out cheaper alternatives to domestic corn.
Sorghum imports will almost double to 7 million tonnes, while barley will also reach 7 million tonnes versus 4.89 million tonnes a year earlier, according to Zhu.
Imports of cassava, also used as a corn substitute in animal feed, will exceed 9 million tonnes while cassava starch imports are seen up 27 percent to 2.4 million tonnes.
The forecasts are similar to those made by the official think-tank China National Grain and Oils Information Centre.
Shipments of corn will also increase however to 4.37 million tonnes, up from 2.3 million tonnes in 2013/14, following Beijing's approval of the MIR 162 genetically modified varieties for import in December, said Zhu. It had previously rejected imports of the corn for more than a year.
"Imports will increase from March. Corn imports will exceed 4 million tonnes, and half could be GMO corn with the other half non-GMO."
While corn consumption by China's processors has declined every year since 2010/11, it may recover this year to 50 million tonnes, thanks to the recent increase in export tax rebate on corn starch and other corn products, he added.
"We expect the starch sector to improve this year, which may increase corn consumption by 1 million tonnes," said Zhu.
The Beijing will begin to sell corn from its state reserves this week, a month earlier than last year, as it looks to shift record stockpiles.
Demand will likely be weaker than last year at around 25 million tonnes, said Zhu, without elaborating.