7 Reasons Why Corn Import is Booming in 2023
Corn is one of the most widely cultivated crops in the world, and its demand is growing every year. In 2023, the global corn import is expected to reach a record high of 200 million metric tons, according to the International Grains Council. But what are the factors behind this booming trend? Here are seven reasons why corn import is on the rise.
1. Climate change and weather variability.
Corn is a crop that requires a lot of water and sunshine to grow well, but climate change and weather variability are making it harder for some regions to produce enough corn. Droughts, floods, heat waves, pests, and diseases are affecting corn yields and quality in many countries, especially in Africa, Asia, and Latin America. As a result, these countries have to import more corn to meet their domestic needs and avoid food insecurity.
2. Population growth and urbanization.
The world population is projected to reach 8.5 billion by 2030, and more than half of them will live in urban areas, according to the United Nations. This means that more people will have higher incomes and more diverse diets, which will increase the demand for corn and corn products. Corn is not only used as food for humans, but also as feed for animals, such as poultry, pigs, and cattle. As people consume more meat, eggs, and dairy products, the demand for animal feed will also rise.
3. Biofuel production.
Corn is also used as a source of biofuel, which is a renewable and cleaner alternative to fossil fuels. Biofuel production has been growing rapidly in recent years, driven by environmental concerns and government policies. The United States is the largest producer and consumer of biofuel from corn, followed by Brazil and China. In 2023, the global biofuel production from corn is expected to reach 140 billion liters, according to the International Energy Agency.
4. Trade liberalization and market integration.
Trade liberalization and market integration have facilitated the flow of goods and services across borders, creating more opportunities for corn exporters and importers. The World Trade Organization (WTO) has been promoting free trade and reducing trade barriers among its members since 1995. In addition, regional trade agreements (RTAs), such as the North American Free Trade Agreement (NAFTA), the European Union (EU), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), have also enhanced trade cooperation and integration among their members.
5. Technological innovation and productivity improvement.
Technological innovation and productivity improvement have enabled corn producers to increase their output and reduce their costs. For example, biotechnology has developed genetically modified (GM) corn varieties that are resistant to pests, diseases, herbicides, and droughts. Precision agriculture has used satellite imagery, drones, sensors, and artificial intelligence to monitor crop conditions and optimize inputs. Irrigation systems have improved water efficiency and reduced water wastage.
6. Price competitiveness and availability.
Corn is a price-competitive and available commodity that can be easily transported and stored. Compared to other grains, such as wheat and rice, corn has a lower production cost and a higher yield per hectare. Corn also has a longer shelf life and can be stored for up to two years without losing its quality or nutritional value. Moreover, corn can be processed into various products, such as flour, starch, syrup, oil, ethanol, and animal feed.
7. Cultural preferences and traditions.
Corn is a staple food for many cultures and traditions around the world. For example, in Mexico and Central America, corn tortillas are an essential part of their cuisine. In Africa, corn porridge is a common breakfast dish. In China, corn noodles are a popular snack. In India, corn bread is a traditional food for festivals. In addition to food, corn also has symbolic meanings for some cultures. For example, in Native American cultures, corn represents life, fertility, and abundance.
These are some of the reasons why corn import is booming in 2023. Corn is a versatile crop that can meet various needs and preferences of consumers around the world. As the global demand for corn continues to grow, so does the global supply of corn from different regions.
Global Demand for Corn Imports
Corn is one of the most important grains produced and traded worldwide. In 2022, global corn imports reached a total value of US$68.8 billion, an increase of 82.9% from 2018 and 16.3% from 2021 . The main drivers of this growth were the rising demand for animal feed, biofuels, and food products made from corn.
The top corn importers in 2022 were China, Japan, Mexico, South Korea, and Spain, accounting for 38.2% of the total corn imports . China alone imported US$7.1 billion worth of corn, a surge of 1,000% from 2018 and 150% from 2021 . This was mainly due to the recovery of its hog industry from the African swine fever outbreak and the need to replenish its corn reserves.
Regional Variations in Corn Import Patterns
Different regions of the world have different patterns of corn importation, depending on their production, consumption, and trade policies. For example, in Asia, the largest corn importer was Japan, followed by South Korea and Vietnam . These countries rely heavily on corn imports for their livestock and poultry sectors, as well as for their food processing industries.
In Europe, the largest corn importer was Spain, followed by Italy and France . These countries have a high demand for corn for animal feed, especially for their pork and poultry industries. They also import corn for human consumption, such as for making polenta, tortillas, and popcorn.
In North America, the largest corn importer was Mexico, followed by Canada . Mexico imports corn mainly from the United States, its main trading partner under the USMCA agreement. Mexico uses corn for both animal feed and human consumption, especially for making tortillas, a staple food in its cuisine.
Future Prospects for Corn Import Markets
The global demand for corn imports is expected to remain strong in the coming years, as the world population grows and the demand for meat and dairy products increases. According to the USDA, global corn imports are projected to reach 203 million metric tons by 2030/31, an increase of 28% from 2020/21.
The main factors that will influence the future trends of corn import markets are the production and consumption patterns of major corn exporters and importers, such as the United States, China, Brazil, Argentina, Ukraine, and the European Union. The weather conditions, crop yields, trade policies, biofuel mandates, and exchange rates will also affect the supply and demand of corn in the global market.
References:
https://www.nber.org/chapters/c9585
https://doi.org/10.1093/ej/ueab029
https://www.worldstopexports.com/corn-imports-by-country/
https://apps.fas.usda.gov/psdonline/app/index.html#/app/downloads
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