In 2001, the demand for high-quality strong-gluten first-class corn (6f packaged corn) reached 2 million tons, while the demand for high-quality strong-gluten second-class corn (used for boiled noodles, noodles, and dumplings) was 7.5 million tons. The demand for high-quality weak-gluten wheat, such as cake wheat, was around 10 million tons. Additionally, the demand for medium-gluten wheat for other steamed products reached 26.5 million tons. By 2007, the national demand for high-quality corn was estimated to be 16 million tons, with specific needs for first-class strong-gluten corn at 2.6 million tons, second-class strong-gluten wheat at 700,000 tons, and high-quality weak-gluten corn at 3.7 million tons. Based on current yield levels, it is estimated that 4 million hectares should be allocated for high-quality corn production. This includes 666,800 hectares for the first class, 2,466,800 hectares for the second class, and 868,800 hectares for weak-gluten corn.
At that time, the planting area for high-quality corn in China was 2,133,300 hectares. However, there was a significant gap between the production and demand of high-quality corn. Moreover, most of the domestically produced high-quality corn was mixed with lower quality grains during acquisition and distribution, leading to a loss of value. As a result, the usable amount of high-quality corn was limited, causing supply to fall short of demand. This large disparity between market supply and demand created substantial opportunities for the development of high-quality wheat.
China has certain advantages in corn production compared to major exporting countries. In 2001, China's average corn yield per hectare was 4,050 kg, which was 51% higher than that of the United States and 10% higher than Canada. This gives China a strong competitive edge in the global corn trade. From a cost perspective, the average production cost per hectare of corn in China increased from 1,725 yuan in 1990 to 3,975 yuan by 2000—a 1.3-fold increase. Material costs rose from 1,125 yuan to 2,535 yuan, making up 64% of total production costs, which is 9% higher than in the U.S. This slightly affected price competitiveness. However, when considering terminal prices, China’s high-quality corn still holds a significant advantage. For example, the FOB price of U.S. No. 2 corn was around 130.6 USD per ton, but after adding freight, customs duties, taxes, insurance, and unloading fees, the CIF price became much higher than China’s domestic prices. Domestic high-quality corn varieties like 8901 were priced at 1,450 yuan per ton, while Jinan 17 and Jiangsu white soft wheat were priced at 1,350 and 1,230 yuan per ton, respectively—showing clear price advantages.
Joining the WTO had a significant impact on China’s corn production. The U.S., as a major corn producer and exporter, became a key player in China’s corn market. Compared to the U.S., China’s corn yield per hectare was about 68% higher, but the production cost per hectare was 2,167.8 yuan, 21 times higher than in the U.S. China’s average profit per hectare was also 8% lower than that of the U.S. High-quality corn varieties had lower yields compared to main maize varieties, which made them less competitive in some aspects.
After joining the WTO, China committed to reducing agricultural tariffs, implementing an import quota system, and increasing the share of imports. According to the Sino-U.S. agreement, China pledged to increase corn imports. The corn import quota was 8.468 million tons in 2002, rising to 9.636 million tons by 2005. Within the quota, the tariff rate dropped to 1%-3%. China also agreed to accept low-pollution U.S. corn, allowing direct shipping from Pacific ports, significantly reducing freight costs and enhancing price competitiveness. High-quality imported corn, with its stable quality and favorable bulk density, is highly favored by processing companies. It is expected that after the quota system was implemented in 2005, corn imports would rise according to market demand. Therefore, foreign corn may not directly affect the high-quality corn market in China or reduce farmers’ income. To mitigate these impacts, it is crucial to promote research and production of high-quality corn in China, enhancing both international and domestic competitiveness.
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