China is set to exceed for a second year a corn-buying quota set by the World Trade Organization as the Asian nation embarks on its biggest-ever American buying spree, according to people familiar with the matter.
The Asian nation bought almost 6 million metric tons of U.S. corn this week, its biggest weekly purchase ever, data from the U.S. Department of Agriculture showed. China will pick up another 2 million tons in this round of purchases, taking it over the WTO quota, said the people, who asked not to be identified because the information isn’t public.
China is scooping up American crops to feed a hog herd that’s recovering from a deadly pig disease faster than most traders expected. Earlier this week, the boss of Archer-Daniels-Midland Co., one of the world’s largest agricultural commodity traders, said the Asian nation will import 25 million tons of corn from all countries. Ukraine is another big supplier of corn to China.
“We think that the inventories, reserves are much lower than what the market is reporting there,” CEO Juan Luciano said, commenting on Chinese stockpiles. “They are trying to rebuild their herd, but also by the professionalization of the feeding that has included much more of all these grains in the ration, so we think that we will continue to see multi-year increases in China’s appetite for all these commodities.”
Corn futures in Chicago rose 1.7% at 11:36 a.m. New York time Friday, after falling 0.2% earlier.
The U.S. was already scheduled to ship another 5.9 million tons of corn to China this season before the 6 million-ton purchase this week, USDA data showed. That’s higher than the WTO quota of 7.2 million tons for a calendar year.
China imported 11.3 million tons of corn last year, exceeding the WTO level for the first time, customs data showed.
