The U.S. Grains Council is hosting a Chinese trade delegation in the U.S. this week. The group had several stops, including farms in South Dakota and Nebraska to look at this year's crop.
Grains Council CEO Tom Dorr says the trade mission is highly significant. It proves the Chinese are interested in buying more U.S. corn, especially since the delegates have high ranking positions in government and industry.
"These are people who are very significant decision makers and it is important that they see our biotechnology resources, our farm resources, and our infrastructure," Dorr said. "And actually have the chance to discuss with farmers and policy makers some of the issues that are a concern to them in order to develop a level of assurance that we can in fact be sustainable long-term suppliers."
Dorr says the current impediments to China importing more U.S. corn include the quantity and quality of the crop. But he says the biggest issue is the safety of biotech crops.
"A very major issue within the Chinese population is biosecurity and food safety," Dorr said. "Food safety is something we in the United States for a variety of reasons take largely with a grain of salt. This is something that concerns the Chinese greatly because of the history of their lack of regulatory oversight."
China imported 1.6 million metric tons of corn and three million metric tons of DDGs in 2010. The country has also booked 3.5 million metric tons of corn this year. Dorr says going forward they hope those totals will grow in tandem with China's growing economy.
"I'm assuming on a calendar year basis they are soon going to be taking five, six, maybe seven million tons of corn," Dorr said. "I thought they would take more corn last year or up to this point than they did. It's clear to me that they've liquidated more of their inventories and as a result they are going to want to refill those inventories. The thing that we do know is they are having a good corn crop this year, so they may raise another 10 million tons more corn than they had last year, but their growth and demand is really quite stunning. So we don't think that is going to significantly slow up their demand for corn from foreign sources."
However, Dorr says the U.S. will have to work to get China's business since they also purchase grain from other sources like Argentina and Brazil.