context: Given the huge gap in feed grain supplies, no one from the industry foresaw a dramatic decline in imports. However, the pressure may be slightly eased by diversifying trade partners. Notably, Brazil has now entered the Chinese corn market.
2022 grain imports totalled 147 million tonnes, a 10.7 percent y-o-y decrease, according to NBS (National Bureau of Statistics). Despite still being the dominant imported grain variety, accounting for 62 percent of imports, soybean volumes decreased by 5.6 percent to 91 million tonnes.
Several reasons contributed to the shrinking amount, explains Yicai, citing experts. The appreciation of the US dollar and surging global grain prices discouraged importers. The FAO cereal price index hit a historic high in 2022, significantly driving up trade costs. Even with the falling volume, China’s annual import value still grew by 10.5 percent y-o-y.
Less feed grain demand also explains the decline, partly due to the rollout of the technical plan to replace soybean and corn in feed formulas. However, the level of feed grain imports remains high. Corn surpassed the import TRQ (tariff rate quota) for the third consecutive year, while wheat set a new import record, and rice, boosted by the procurement of broken rice as a feed alternative, broke the TRQ for the first time. All indicators suggest a possible further rebound of feed grain imports as there will likely be more pigs needing feed in 2023.
That said, falling grain imports may be a temporary thing. The 2022 volume was the second highest in history, just behind 2021's. Old challenges, including overreliance on several major exporters and astronomical demand for feed grain, still haunt policymakers.