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Corn Substitutes Imports in the First Three Quarters of 2017 Didn’t Decrease Obviously Compared to 2016

China Agriculture Report By CnAgri2017-11-02 10:28:13China Agriculture Report Print In the first three quarters of 2017, the actual imports of corn substitutes such as corn, sorghum, barley, DDGS and tapioca chips totaled 19.74 million MT (conversion into corn imports: 18.24 million MT), only down 6.5% or 1.36 million MT compared to that in the same period of last year, and the market forecast of an obvious drop didn’t appear. Judging from the structure of import varieties, influenced by anti-dumping and anti-subsidy policies, DDGS imports decreased by 86% year on year, and corn and sorghum imports were down 24% and 25% year on year; but barley imports increased sharply, up more 80% year on year, and tapioca imports also increased slightly.   
The main reasons for a slight decline in corn and substitutes imports are as the follows:
First, the substitutes still have price advantage. Along with the starting of auction of temporary reserves since May 2017, grain prices have not decreased greatly, with the addition of warehouse-out expenses, grain costs can’t be less than import prices; considering of low efficiency of grain warehouse-out, some feed companies would increase purchase volume for imported substitutes in the second half of 2017.
Second, some corn substitutes have formed stable demand channels. For example, among barley imports, more 40% are used for beer malt production; however, many tapioca starch and alcohol producers in the south mainly depend on imported materials.    
After new corn availability on the market, corn prices maintain at a high level. The contradiction of an oversupply possibly would be reversed in the next several years, and corn and substitutes imports would keep a certain scale. 
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