Thread: China's grain demand should boost U.S. exports

China's grain demand should boost U.S. exports

By Kathy Chu, USA TODAY
Updated 2h 16m ago

Even as its economy cools, China's demand for imported grain is likely to surge this year, providing a boon to the U.S. and other exporting nations.

This week, China reported that strong imports had sharply narrowed its January trade surplus to $6.45 billion from $13.1 billion in December.

That reflects the country's growing appetite for commodities and other goods.

China is one of the largest metals and energy consumers in the world. It's also a top importer of U.S. agricultural products.

In China, "strong imports-growth momentum is supported by strong domestic demand," Goldman Sachs economists Yu Song and Helen Qiao wrote in a report Monday.

Many analysts expect China's robust appetite for corn, wheat and soy to expand in 2011 as the country grapples with severe droughts in the north. Corn and soy are primarily used for animal feed, which is in high demand as incomes rise and people consume more meat.

"At the end of the day, (China) needs these commodities because of the population's growth," says Kevin Kerr, president of Kerr Trading International.

Steel and iron — whose prices have soared amid China's building boom — might slip if the country's property bubble bursts, he says.

But overall, China's long-term appetite for commodities of all kinds will be sustained by its massive transportation, housing and infrastructure projects, along with the needs of its up-and-coming middle class.

In the 24 months ended in January, the International Monetary Fund's primary commodity index, which measures the average price for commodities such as energy, grains and industrial materials, has soared 79.5%. Prices for cotton and copper have hit records recently, in part due to high demand from emerging markets such as China.

Still, China's measures to cool its economy could crimp the country's imports short-term. The fear is, if the economy slows, China won't need the same amount of commodities.

"I don't see a collapse in commodity demand, but some moderation is possible" from the last two years' healthy pace, says Jian Chang, China economist for Barclays Capital.

http://www.usatoday.com/money/industrie ... 8_ST_N.htm

China's grain demand should boost U.S. exports

Yep, and it'll increase American consumer cost. Welcome to supply and demand in the global economy.

Wonderful news for the giant corporate farms who use Illegal Alien labor whenever possible...

The U.S. needs the income from exports to all over the world.
It'll help cut the balance of trade.

'Absolute madness' of biofuels

This year, it will consume 40 percent of all US corn - that's about 15 percent of global corn production or 5 percent of all global grain - in order to . . .

http://www.washingtontimes.com/news/201 ... red-power/

Originally Posted by JohnDoe2

The U.S. needs the income from exports to all over the world.
It'll help cut the balance of trade.

We need to be exporting manufactured goods, not our grain supply, especially when you consider the amount of corn being used for ethanol. Oh, that's right, we've already exported most of our manufacturing industry.

It's not worth it, JohnDoe, because attempting to meet China's demand for grain will have a huge impact on many of our main food sources like cerals, baked goods, meat, poultry and dairy products. Before we made China viable in the market place, this wasn't an issue because they couldn't compete for huge quantities of our grain.

The solution is to stop using food crops to make fuel because it make the food and the fuel expensive.
Then we can sell food to other counties for the much needed income.

(The End.)