Record Wheat and Corn Utilization in china Met by Domestic Production: Second Year of Minimal Trade Impact

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Commentary: Record wheat use in China in 1997/98 will largely be met by record production, while a drawdown of record carryin corn stocks will enable use to continue to expand despite sharply reduced production. For 1997/98, China is projected to register the lowest level of wheat imports of the past 20 years, while remaining a marginal net exporter of corn. Recent internal discussions in China have focused on their continuing desire for self-sufficiency in grain. Not coincidentally, the past two years have seen the lowest level of import dependence in the past two decades.

While China is expected to remain an importer of wheat and a net exporter of corn for the second year in a row in 1997/98, a dramatically different stocks situation exists for the two grains. A record corn harvest in 1996/97 resulted in record stockpiles, which are expected to be drawn down by one-third to make up for the 17.5 million ton year-to-year crop reduction. Conversely wheat stocks are expected to rise by nearly 40 percent, due to a steep increase in production coupled with continued flat consumption.

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