Chinese importers are rejecting contracted shipments of Ukrainian corn due to the government's policy of supporting local farmers.
Currently, Chinese buyers have already rejected 4-6 cargoes of Ukrainian corn that were supposed to be delivered to China in April-June, Bloomberg reports, citing informed sources.
According to the agency's interlocutors, these contracts were canceled in the last two weeks and there may be more such cases in the future.
Buyers canceled the orders after Chinese customs officials intervened and urged traders to limit imports to ease the oversupply of corn in the domestic market and support prices for local farmers ahead of the planting season.
Chinese traders can bring corn into special customs zones where it is processed into animal feed, which is subject to a lower tax rate. However, local authorities have already warned traders and processors against setting up new processing plants in border zones and have reduced corn imports to these zones compared to last year. According to the agency, some importers had already ordered more deliveries than the Chinese government wanted, so they had to be canceled.
China is the largest importer of corn in the world. The cancellation of imports from Ukraine could hit world market prices, which have fallen following bountiful harvests in the USA and Brazil are already under pressure, as Bloomberg reports.
Source: Ukragroconsult (Ukraine)