The import of grain in the first quarter is expected to significantly decrease, which is conducive to the rebound of domestic grain prices

Since the second half of 2024, China's grain imports have gradually slowed down, with a significant decrease in imports of wheat, corn, and other crops. It is expected that the import volume of grain to ports will continue to decline in the first quarter of this year, and the tight balance between domestic grain supply and demand will be strongly supported. Market expectations continue to improve, and grain prices are expected to continue to recover.

Grain imports are expected to continue their downward trend in the first quarter of 2025

According to customs data, the cumulative import volume of grain in China from January to February was 17.357 million tons and the import value was 7.484 billion US dollars, a year-on-year decrease of 35.2% and 35.6% respectively. Among them, the import volume of soybeans was 13.66 million tons and the import value was 6.302 billion US dollars, an increase of 4.4% and a decrease of 14.8% respectively.

From the perspective of grain prices, the international price advantage has weakened, and there is no significant price difference condition for imports. In February 2025, the average grain price index of the Food and Agriculture Organization of the United Nations (FAO) was 112.6 points, an increase of 0.7% compared to the previous month. The price difference between domestic and foreign products such as corn continues to narrow. In December 2024, the landed tax prices of wheat and corn imports were 0.07 yuan and 0.02 yuan per kilogram lower than domestic prices, respectively. The price difference narrowed by 0.12 yuan and 0.13 yuan year-on-year, respectively. The corn price per ton at East China Port in January 2025 will be 2130 yuan, which is 300 yuan lower than the average import price of sorghum from the United States. Sorghum imported from the United States does not have a price advantage.

According to the latest forecast from the US Department of Agriculture in February 2025, China's grain imports for 2024/25 are expected to be significantly reduced, with corn and wheat imports expected to be 10 million tons and 8 million tons respectively, a decrease of nearly 20% from the January forecast and a decrease of 57% and 32% from the average levels of the past four years; The forecast for China's soybean imports in 2024/25 has also been adjusted to 109 million tons, a decrease of 2.7% from the previous year. According to the US Export Weekly, China's corn purchases from the US in 2024/25 have dropped to the lowest level in the same period in 8 years.

Domestic grain prices stabilize and rebound, receiving strong support

In recent years, China's grain production has continued to increase, consumption has steadily increased, and some varieties have been moderately imported. The total supply and demand are in a tight balance, and overall prices have remained basically stable. Since 2022, with the significant decrease in international grain prices, non essential imports driven by profit have grown rapidly, exceeding the domestic production and demand gap, exacerbating the pressure of temporary oversupply, resulting in a widespread and sustained decline in grain prices and a decline in farmers' income from grain cultivation. Since the second half of last year, with the tightening of grain imports and a significant decline in profit driven non essential imports, the domestic grain supply and demand pattern has tended to balance, the market operation has returned to a normal track, and grain prices have gradually bottomed out and stabilized.

At the same time, various market regulation policies are working together to address the excessive decline in grain prices. The minimum purchase price for rice and wheat remains stable with an upward trend, indicating clear policy support signals. The purchase of corn and soybean reserves has always been in the market, which is conducive to boosting market confidence. After the Spring Festival this year, with the effectiveness of various regulatory policies and the recovery of downstream starch, soybean meal, and soybean oil consumption, corn and soybean processing profits have been good, and enterprise operating rates have remained high. They have raised prices to purchase, with prices generally rising by 100-200 yuan per ton compared to before the festival, driving the overall grain prices to remain stable and strengthen.

From the later trend, supported by factors such as tightened imports, improved consumption, and strong regulation, the domestic grain market prices are expected to continue to maintain a steady upward trend.