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. High-quality weak-gluten wheat (Cake 1; cake wheat) had a demand of about 10 million tons. Meanwhile, the demand for medium-gluten wheat used in various steamed buns and breads reached 26.5 million tons. By 2007, the national demand for high-quality corn was estimated at 16 million tons, with specific demands including 2.6 million tons of high-quality strong-gluten first-class corn, 700,000 tons of strong-gluten second-class wheat, and 3.7 million tons of high-quality weak-gluten corn. To meet these needs, it was estimated that 4 million hectares should be allocated for high-quality corn production, with 666,800 hectares for quality, 2,466,800 hectares for second-class strong gluten, and 868,800 hectares for high-quality weak gluten.
At that time, the planting area for high-quality corn in China was 2,133,300 hectares. However, there was a significant gap between production and demand. Moreover, most domestically produced high-quality corn was mixed with lower-quality corn during acquisition and distribution, leading to a loss of value. As a result, the amount of usable high-quality corn was limited, and supply fell short of demand. This large disparity created ample room for the development of high-quality wheat.
China has certain advantages in corn production compared to major exporting countries. In 2001, the average yield of corn in China was 4,050 kg per hectare, which was 51% higher than that of the U.S. and 10% higher than Canada. This gives China a strong competitive edge in the global corn market. However, production costs have risen significantly. From 1990 to 2000, the average cost per hectare increased from 1,725 yuan to 3,975 yuan, a rise of 1.3 times. Material costs also surged from 1,125 yuan to 2,535 yuan per hectare, accounting for 64% of total costs. Although this is 9% higher than in the U.S., China’s high-quality corn still holds a clear price advantage when considering final market prices.
Currently, the FOB price of U.S. and Canadian corn ranges from 994 to 1,240 yuan per ton. However, after factoring in freight, customs duties, value-added tax, insurance, and unloading fees, the final price becomes higher than that of Chinese high-quality corn. For example, in February 2002, the FOB price of Canadian No. 2 corn was 130.6 USD per ton, but the CIF price within the quota was 1,535.4 yuan per ton, adding around 2,550 yuan per ton. Similarly, U.S. No. 2 hard red spring wheat had an FOB price of 130.6 USD, with a CIF price of 1,509.6 yuan, and Australian hard wheat at 166 USD per ton with a CIF price of 1,770.6 yuan. In contrast, China’s high-quality corn varieties, such as 8901 at 1,450 yuan per ton, Jinan 17 at 1,350 yuan per ton, and Jiangsu white soft wheat at 1,230 yuan per ton, still offered strong price competitiveness.
After joining the WTO, China committed to reducing agricultural tariffs, implementing an import quota system, and increasing the share of imported corn. According to the Sino-U.S. agreement, China pledged to increase corn imports. The 2002 import quota was set at 8.468 million tons, rising to 9.636 million tons by 2005. The tariff rate within the quota dropped to 1–3%. Additionally, China agreed to accept low-pollution U.S. corn, allowing direct shipping from Pacific ports, which significantly reduced freight costs and enhanced price competitiveness.
Imported high-quality strong-gluten and weak-gluten corn, known for their high bulk density, stable quality, and weight tolerance, are highly favored by processing enterprises. It is expected that after the quota system began in 2005, China's corn imports would grow based on market demand. Therefore, foreign corn is unlikely to directly impact the high-quality corn market in China, nor will it negatively affect farmers’ income or discourage them from growing high-quality wheat. To counter potential competition and maintain market stability, it is essential to vigorously develop research, production, and promotion of high-quality corn in China, enhancing both domestic and international competitiveness.
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