China corn crop to fall 2.3 pct in 2016 - Grain Centre


China's 2016 corn harvest will drop 2.3 percent from the year before to 219.5 million tonnes, said an official think-tank, with farmers planting less of the grain following a change in government support.

Planted acreage in the world's No.2 corn producer will fall almost 5 percent to 36.3 million hectares, said the China National Grain and Oils Information Centre, but yields are expected to increase to 6 tonnes per hectare, up by 162 kg from last year.

China's corn output is closely watched by overseas markets, with U.S. prices hitting multi-year lows last week under pressure from expectations of a record U.S. crop.

After years of government stockpiling of corn, leading production to hit levels far beyond market demand, Beijing has abandoned the policy and is trying to encourage farmers to grow alternative crops.

But analysts say even with a gradual decline in planted acreage and a boost to consumption due to lower prices, it could take years for China to get rid of state stocks.

China's agriculture minister has previously said corn acreage would stabilise at around 33.3 million hectares by 2020, a number seen as too modest to address current overcapacity.

The think-tank also predicted a 12 percent jump in corn consumption in the 2016/17 marketing year, starting in October, to 199 million tonnes. Feed accounts for about 60 percent of demand, with most of the rest used by industrial users.

It said imports in 2016/17 would fall to 1 million tonnes, down by 2.2 million tonnes on this year, or a drop of 69 percent.

The United States agriculture department also expects imports to fall to 1 million tonnes next year.

Aside from corn, the think tank forecast that 2016 soy output will rise by 12.9 percent from a year earlier to 13.1 mln tonnes, after acreage expanded by 11 percent.

Rapeseed output will fall 6.2 percent to 14 million tonnes, wheat output will fall 1.2 percent to 128.6 mln tonnes and rice production will increase by 0.4 percent to 209.1 million tonnes, it said. (Reporting by Dominique Patton; Editing by Joseph Radford and Christian Schmollinger)

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