Image: Climate Progress
It's no secret that food prices are on the rise, but import estimates from China show that corn prices in particular are set to go through the roof. And if you know anything about where our food comes from, that means prices for meat—and dairy—as well as other foods processed with corn (think: high fructose corn syrup) are on their way up, too. The Financial Times reports that because corn production in China has been down while demand (because of increasing meat consumption) is up, the country is expected to start regularly importing giant amounts of corn.
FT quotes Terry Vinduska, chairman of the U.S. Grain Council:
"Estimates given to us were that China is short of 10m-15m tonnes in stocks and will need to purchase corn this year". He pointed to about 9m tonnes in imports. "We learned the government normally keeps stocks at 30 per cent but they are currently a little over 5 per cent, which may lead to imports of 3m-9m tonnes."
Nine million tons is a stark contrast to the 4.3 million tons that the story said was China's record-highest import (in 1994-95), at least in the last 50 years.
It is not the first warning of forthcoming massive imports. Recently, David C. Nelson, at Rabobank, one of the world's largest lenders to the global agribusiness industry, warned that because China's animal protein industry is so large, the order of magnitude of China shifting to become a net importer of corn could possibly be measured in tens of millions of tonnes, and in just a few years time.
The forecast is not certain, but as the story points out, "when China started to import soyabean back in 1995, few thought the country would today be buying nearly 60 per cent of all the global trade in soyabean."
And there were signs even before China's corn imports were such a concern: MoneyWatch pointed out late last year that while food prices overall were expected two to three percent in 2011, it's a very different picture for meat (not just red meat) and dairy.
Check it out, from late last year (all based on USDA figures):
- Beef and veal: So much for deflation. The USDA expects prices for beef and veal to increase 3.5 percent this year, and rise another 3.5 percent in 2011.
- Pork: An expected 4.5 percent to 5.5 percent rise in pork prices in 2010 will be followed by another 3 percent to 4 percent rise in 2011.
- Dairy Products (other than eggs): After rising 1.5 percent to 2.5 percent in 2010, the USDA is forecasting a 4.5 percent to 5.5 price increase on dairy products in 2011.
More on global food prices
World Food Prices Hit Record Highs: 4 Foods Out of Range in 2011
Food Prices in World's Poorest Nations May Rise 20% in 2011
Global Food Prices Hit Record Highs in January & Will Stay That Way For Months: UN FAO
More on food security and climate change
Economist: Climate Change=Higher food prices
Rising Temperatures, Rising Food Prices
The Emerging Politics of Food Scarcity