China’s General Administration of Customs (GACC) released the nation’s December import statistics on Thursday of last week, completing the 2023 data set, which saw total grain imports for the year rise to 162 million metric tonne, 12 per cent higher than in 2022. Second only to the record of 164.5mmt set in 2021, the value of the 2023 grain import program was US$82.3 billion, down slightly from US$82.65 billion the previous year.
Grain imports in December jumped 38 per cent compared to the previous corresponding period to 18.27mmt, boosted by corn receivals of a record 4.95mmt. This corn number was up from only 870,000 metric tonne twelve months earlier and beat the previous record for any month of 3.59mmt, which was set a month earlier. Prior to that, the monthly record had been the June 2021 total of 3.57mmt.
Corn imports for the 2023 calendar year came in at 27.13mmt, 31.6 per cent higher than the 20.62mmt total in 2022. Corn imports surged in the last four months of the year, with Chinese buyers lured by attractive prices out of Brazil, after a bumper harvest in South America’s biggest producer boosted global supplies and pushed export values lower. Imports in the September to December period totalled 12.21mmt, 45 per cent of last year’s total.
While Ukraine continues to be a significant supplier, China embarked on a corn origin diversification program following Russia’s invasion of its neighbour almost two years ago to ensure it did not become beholden to the United States. Import approval for Argentinian corn has reportedly been granted, replicating the same move from Brazilian corn early last year, and flows out of South Africa also took off in 2023.
China’s consumption of feed grains is expected to increase by 5mmt for 2023-24 and reach record levels, according to Anamaria Martins, senior analyst at S&P Global. The USDA left China’s 2023/24 corn imports unchanged at 23mmt in this month’s global supply and demand update, up from 18.71mmt. While China did produce a record 288.84mmt of corn this season, the current import pace suggests the USDA may be on the low side by the season’s end.
Soybeans made up almost 54 per cent of total grain imports in December, with 9.82mmt discharged at various ports around the country, down from 10.55mmt a year earlier. Total 2023 soybean imports finished at 99.41mmt, up from 91.08mmt a year earlier, after Chinese buyers took advantage of cheaper supplies from Brazil. The total value of the soybean purchase program came in at US$59.76 billion, 72.3 per cent by value of total grain imports in 2023.
Brazil now dominates the Chinese soybean market with imports from South America’s biggest producer jumping by 29 per cent year-on-year to 69.95mmt in 2023. At the same time imports for the US fell by 13 per cent to 24.17mmt. Soybean arrivals from Brazil last month were 94 per cent higher than December 2022 at 4.98mmt, while those from the United States were 31 per cent lower at 3.85mmt.
A shrinking pig herd is expected to see Chinese soybean imports fall by as much as 20 per cent in the first quarter of 2024. Imports in the first quarter of 2023 were 23.1mmt but dwindling demand could see a drop to less than 18.5mmt this year, suggesting that USDA’s current 2023/24 import estimate of a record 102mmt is already looking extremely optimistic. A demand slump in the hog sector late last year reportedly triggered a rush to slaughter pigs as farmers battled plummeting prices for their produce.
China’s largest pig breeder, Muyuan Foods Co, allegedly sold 6.6 million animals in December, up 25 per cent month-on-month and up 10 per cent compared to December 2022. Wen’s Foodstuff Group Co, a part of the same group, sold 2.97 million hogs last month, up 15 per cent on the month and 58 per cent annually. However, the soybean crush margin has been smashed with fewer pigs to feed in the world’s largest breeder and consumer. Dalian soybean meal futures have fallen 8 per cent this month to their lowest level since August 2023.
Meanwhile, China’s December wheat imports totalled 610,000mt, down 7.6 per cent on the month. Total imports for the year rose 21.5 per cent to 12.1mmt, well above China’s tariff-rate quota of 9.636mmt. Australia exported 6.383mmt to China in the 11 months to the end of November, making up 52.8 per cent of total Chinese imports in 2023, with the December export data yet to be released.
On the barley front, Chinese imports of barley topped 1mmt in each of the past four months. The buoyant demand coincided with the lifting of the ban on Australian barley in August last year. Incoming shipments in December totalled 1.66mmt, 36.1 per cent above the November number of 1.22mmt. Total barley imports in 2023 were 11.32mmt, up from 5.76mmt a year earlier. Since Australian barley exports resumed to China in August shipments have totalled 1.81mmt to the end of November. August was relatively tame at only 55,700mt, but the execution campaign ramped up quite quickly thereafter, with 371,000mt in September, 664,000mt in October and 721,000mt in November.
Conversely, China’s sorghum imports fell dramatically in 2023, particularly in the back end of the year. December receivals were 35.2 per cent lower than November at 350,000mt, and total imports for 2023 were 5.21mmt, 48.6 per cent lower than the 10.14mmt discharged in 2022. By the end of November, Australia had shipped 2.06mmt, 39.5 per cent of the total, with 1.91mmt of that exported in the March to September period.
Last week’s data also revealed an annual fall in total Chinese exports for the first time since 2016, despite the December number beating expectations. December exports rose 2.3 per cent in US dollar terms last month but fell 4.6 per cent for the year compared to the prior corresponding periods. Imports told a similar story, with the December number 0.2 per cent higher than November, but they fell 5.5 per cent on the year, the first fall since 2020 when the COVID-19 pandemic decimated global trade.
Another interesting, but certainly not surprising, titbit from last week’s data was that trade between Russia and China hit a record high in 2023, as geopolitical tensions pushed commerce with the United States lower for the first time in four years. China-Russia trade topped US$240 billion last year, a year-on-year increase of 26.3 per cent. On the other hand, trade with the US was 11.6 per cent below the 2022 level at US$664 billion. China’s exports to Russia climbed 47 per cent, a rare bright spot in last year’s export data, and imports from Russia rose by almost 13 per cent.
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