Since 20 15, the main source of imported corn in China is Ukrainian corn, followed by American corn. Until 2020, with the outbreak of the epidemic and the surge of domestic pig production capacity, the domestic demand for corn increased sharply, so the import volume increased greatly, and American corn surpassed Ukrainian corn to become the first source country.
However, since the outbreak of the Russian-Ukrainian conflict, Ukraine's grain has been hit hard and is facing a sharp reduction in production.
Recently, the Ukrainian Minister of Agriculture said that the quality of corn was worse than last year.
The decline in the quantity and quality of corn in Ukraine is mainly affected by two factors: one is the difficulty of farming, and the other is the extreme weather.
First of all, since the outbreak of the conflict between Russia and Ukraine, the corn planting area in Ukraine has been greatly reduced.
Affected by the conflict, about half of the wheat producing areas in Ukraine are in serious conflict areas, and about 25% ~ 30% of the corn producing areas are in fierce fighting areas.
A large number of people fled, the fields were left uncultivated, and the planting area fell sharply.
Coupled with the destruction of some farmland infrastructure, it is impossible to cultivate, resulting in a direct reduction in planting area.
Second, the cost of planting has soared.
After the outbreak of the Russian-Ukrainian conflict, global energy prices soared, and high fuel prices and shortages became the heart disease of Ukrainian farmers. Due to the shortage of oil, large agricultural machinery can not be used, and the sowing efficiency is obviously reduced.
On the other hand, the global fertilizer price is also high, which also raises the planting cost.
Third, the export of the Black Sea port is blocked, which affects the capital flow.
After the outbreak of the Russian-Ukrainian conflict, the Black Sea port was blocked for several months, and the grain export income was used to provide sowing funds, so the lack of funds also led to a decline in sowing rate.
These factors have a direct impact on farming, but the weather is not beautiful. Last year, Ukraine ushered in continuous rainfall, resulting in water accumulation in the upper soil. Therefore, the winter grain harvested in 2023 will be planted at the latest date in the past decade, and the harvest rate of corn is obviously behind previous seasons, which damages the quality of corn.
Then, what impact will Ukraine's double reduction in corn quantity and quality have on the global corn market?
First of all, for the global corn market with tight supply and demand, it will make the supply even more short.
As the world's largest source of corn supply, the recent report predicted a sharp reduction in production, leading to a continuous rise in international corn futures prices. Although the follow-up trend is uncertain, it is an indisputable fact that global corn supply and demand are tight.
As an important corn exporter, Ukraine's double reduction in quantity and quality continues to increase the global corn supply pressure, and the supply and demand of corn are even more tense.
Secondly, it has intensified the evolution of global corn supply and demand pattern.
Because the affected corn export in Ukraine dropped sharply last year, international buyers began to open up new sources of goods, so everyone turned their attention to Brazil.
Brazilian corn does live up to expectations and is expected to achieve a record harvest.
However, as buyers put all sources of supply into Brazil, the demand for Brazilian corn will double, which will also push up the price of Brazilian corn.
Therefore, from this perspective, the hidden worries of the global corn market in 2023 still exist. Brazil's corn yield is expected to be high, and there will be no "corn shortage" in the world, but the pattern of tight supply may be difficult to change.