Asian Corn Market Outlook for 2024: China’s demand drives recovery and diversification

New Delhi [India], January 4 (ANI): The Asian corn market is set for dynamic shifts in 2024, driven by the demand dynamics in China and a positive sign of recovery in Southeast Asia.

According to a press release by S&P Global Commodity Insights, several factors, including China’s supply diversification efforts and potential use of genetically modified crops, are poised to influence corn prices and trade flows across the region.

Here’s an in-depth look at the key drivers shaping the Asian corn market in the upcoming year.

In 2023, destination corn prices experienced a steady decline from earlier highs, influenced by a record crop in Brazil that eased global supply tightness.

Despite reaching a 33-month low of USD 239.50/mt in July, corn prices rebounded in the fourth quarter, ranging between USD 255-USD 265/mt.

However, end-users faced price volatility due to persistent weather markets, logistics challenges, and slow farmer selling in Brazil.

As we enter 2024, various factors, such as weather influences, the ongoing Russia-Ukraine conflict, and freight impacts, will continue to contribute to price volatility.

Southeast Asia emerges as a positive force in demand recovery, while China remains a key player shaping the global corn trade equation.

China, one of the largest importers of corn globally, has been actively diversifying its corn suppliers since the onset of the Russia-Ukraine conflict.

Exports from Argentina are on the verge of becoming a reality, following flows from Brazil and South Africa in 2023. China’s demand for corn is expected to remain robust, with consumption projected to increase by 5 million mt for 2023-24, reaching record levels.

China’s approval of Argentine corn imports adds a new dimension to its global sourcing strategy.

The country, always on the lookout for cost-effective options, could turn to Argentina if it offers competitive prices.

This move could support Argentina as a favoured corn supplier, especially amid potential challenges in Brazil’s Safrinha corn planting and production uncertainties influenced by El Nino on Argentinian corn.

Potential changes in Argentinian trade and agricultural policies, including reduced export duties, less market intervention, and increased support for farmers, further favour an export agreement with China.

These changes align with the country’s shift toward more market-friendly policies under its new president, Javier Milei.

China witnessed a record corn production of 288.84 million mt in 2023, a 4 per cent increase from the previous year.

Despite concerns about extreme weather conditions, the country’s strong corn import program persisted.

However, negative hog margins and sluggish demand in the hog market pose downside risks to China’s local corn prices.

In response, the country approved and registered 37 genetically modified corn seed varieties in December 2023, a move closer to commercial planting after successful large-scale trials.

The adoption of genetically modified corn in China is expected to enhance corn yield, potentially increasing production.

Despite the potential increase in local supply, state-owned enterprises are likely to continue importing to stock reserves in the short term.

China’s past import patterns indicate that state-owned enterprises have been consistent buyers, even during periods of weaker domestic prices.

Optimism surrounds the recovery of feed milling and meat demand in Southeast Asia, contributing to positive market sentiments.

Vietnam, in particular, has witnessed an uptick in corn imports as prices fell, maintaining substantial trade flows from various countries.

Market participants express confidence in imports exceeding 10 million mt in 2024, but challenges remain, including animal health concerns and economic risks.

Higher temperatures expected in Southeast Asia during the El Nino window may impact regional corn production.

Indonesia, Thailand, and the Philippines could face weather-related downsides, prompting a closer look at existing import policies in case of production shortages.

The Asian feed and downstream sectors will play pivotal roles in dictating demand dynamics in the global corn market in 2024.

Close monitoring of corn ethanol-related policies in the US and Brazil will be crucial for understanding supply competition in the coming year.


Please enter your comment!
Please enter your name here