China has been increasing its ties in global markets and reducing its dependency on the U.S. food supply.
As the Wall Street Journal recently reported:
Five years ago, the U.S. supplied 97% of China’s corn import needs. In the first half of this year, it accounted for 3.8%.
A rise in China’s meat consumption is contributing to a rise in the country’s corn imports.
For decades, economists have predicted that population paired with economic development in China would lead to an increase in meat consumption.
The majority of the country’s corn, much of which is used for animal feed, is currently imported from Europe.
The Wall Street Journal reported that the bulk of Chinese corn imports come from the Ukraine.
Imports from the eastern European country in the first half of this year were up 852 %, or about eight-fold, from a year ago ... Ukraine accounted for 88 % of China’s corn imports in the period
China also recently reported that it would ease its price-support program for corn farmers.
“Such a move could release a torrent of corn onto world markets,” Inside Futures reported.
The move would benefit the Chicago-based agribusiness company Archer Daniels Midland, especially after its second-quarter earnings fell more than expected.
The company, which is a major ethanol producer, said that “record U.S. production of the corn-based biofuel curbed profit margins in the second quarter by pushing down prices,” the Wall Street Journal reported.
Archer Daniels Midland Chief Executive Officer Juan Luciano said that China easing the price-support program could mean a decline in corn prices, which would bode well for ADM’s business.
Additionally, U.S. soybeans took a hit and lost “international competitiveness” after China cancelled an order for 200,000 metric tons of the seeds, Nasdaq reported last week.