China headed for glut of seed corn as well

Much has been made of the Chinese grain corn stockpiles, but the country is also heading for a massive glut of seed corn.

Chinese corn seed production is booming at a time when the government is pushing to reduce grain corn plantings, which will push the stocks to use ratio to nearly 80% in 2016-17, according to figures from the US Department of Agriculture’s Beijing beau.

Chinese corn seed production is at the second highest level seen in the last two decades, analyst CCM said.

CCM saw the boom in production driven by a rise in the number of authorised seed varieties.

“Secondly, the crop damage as a result of natural disasters has not been as critical as in recent years, allowing the much higher output of corn seeds compared to last year,” CCM said.

Stocks-to-use to swell

The USDA’s Beijing bureau painted a similar picture.

“Weather conditions in major corn seed producing provinces, such as Gansu and Xinjiang, were reported favourable in 2016, which resulted in record high yield at 5,380 kg per ha, about 6% higher than the average for the last 5 years,” the bureau said.

Corn seed production is estimated is seen up 34% year on year “as a result of bigger acreage and better weather conditions”, at 1.47m tonnes in 2016-17.

With usage at 1.15m tonnes, and some 600,000 tonne of carrying stocks, the bureau saw Chinese corn stocks are seen rising to 950,000 tonnes by the end of 2016-17.

This would leave the ratio of stocks-to-use at 78%, compared to 48% in 2015-16.

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Price pressure

The glutted corn seed market will weigh on prices, CCM said.

“All the described factors of low corn seed prices and high competitiveness have led to a negative outlook for China’s farmers to plant corn seeds,” CCM said.

“Low incomes and even losses are the inconvenient reality for many producers.”

 

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