China is changing its grain import approach, prioritizing domestic production to boost food security and aid local farmers. This shift is impacting the global grain trade, specifically reducing the demand for Panamax vessels and lowering their rates on certain routes due to decreased import volumes, reports Drewry.
Import Dynamics
China’s grain imports surged between 2020 and 2023, peaking at 60 million tonnes in 2021. However, in 2024, Mexico surpassed China as the largest grain importer, with China’s imports falling by 13% year-over-year. This decline is expected to continue in 2025, indicating a move towards greater self-sufficiency.
Despite being a major grain producer and exporter, China is actively pursuing increased domestic grain production. This emphasis was evident in 2024 when China canceled or delayed wheat shipments from the US and Australia, resulting in a 37% year-over-year decrease in combined wheat and corn imports. Consequently, China’s global share of wheat and corn imports fell by 5 percentage points from its 2023 peak of 12%.
Phasing Out Imports
China’s increased grain imports after 2020 were largely due to the Phase One US-China trade agreement, which required China to purchase substantial amounts of US corn. While the agreement ended in the first quarter of 2022, US corn exports to China remained high through 2022. However, Brazil then became China’s primary corn exporter, replacing the US.
In 2024, China’s corn imports dropped by nearly 50%. This decline is attributed to China’s strategy of limiting imports to support domestic corn prices. The USDA has revised China’s corn import estimates downward for the 2024-25 marketing year, reflecting this shift.
China’s strong corn harvest in 2023-24, which resulted in a 12 million tonne increase in production, has allowed the country to build a surplus for feed. This surplus, coupled with rising domestic production, is further reducing China’s import needs in 2024-25.
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Source: Drewry
