In the first ten months of 2021, China’s grain imports expanded by nearly 20 MMT (+19%) y-o-y to a record 123.4 MMT, buoyed by a strong corn import program from USA. Historically, soybeans comprise around 85% of its total grain imports in any given year. However, corn rather than soybeans accounted for China’s 2021 growth in grain imports. In fact, soybeans registered a slight decline of 4.1 MMT (-5%) y-oy, with Brazil shipping 12 MMT fewer tons (-19% y-o-y) due to a slightly lower soybean harvest this year.

China’s corn imports topped 26 MMT (+18.4 MMT/+236%) y-o-y by October, with US shipments alone expanding by 16.3 MMT (+650%) y-o-y to a record 19 MMT; the 250 extra shipments y-o-y from USA in the first six months of the year was a factor driving the rise in the sub-Cape market. Corn shipments from USA have now petered out and may not be as active next year as China has had a good domestic corn harvest and swine numbers have now stabilized to pre pandemic levels.

Falling USA corn imports to China coupled with the end of the Brazilian soybean export season has led to China’s October grain imports falling away to just 8.2 MMT in October, 4.3 MMT lower than the 12.5 MMT imported in September and the lowest monthly grain import figure since March of last year. This sharp fall in grain imports has clearly impacted the Panamax market, which has witnessed a sharp decline from mid-October as rates on Panamax from US Gulf/China have fallen in just over a month from a high of $92 to a current rate of $68/ton. This may slip further due to the oil price collapse at the end of last week.