China to Boost Corn Production to Meet Rising Demand for Feed and Fuel

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China’s Ministry of Agriculture has announced that the nation will expand its corn output to more than 150 million tons on some 26.8 million hectares of land in 2010, up from 144 million tons last year. The move is fueled by booming corn demand for livestock feed and industrial uses. Given the scarcity of arable land in China, the government is encouraging farmers to boost productivity of the crop by switching to higher-yielding varieties and modern planting technologies, as well as adopting greater mechanization of farm labor.

China is the world’s second largest producer and consumer of corn. The crop is used mainly as animal feed but also processed into a variety of food and industrial products, such as starch, sweetener, oil, industrial alcohol, and fuel ethanol; only some 7 percent is eaten directly by humans. However, China’s expanding livestock sector, driven by the growing popularity of a meat diet, has largely closed the gap between domestic corn supply and demand.

The ethanol boom in several major corn-producing countries is likely to threaten global corn supplies, putting pressure on Chinese imports. The United States, China’s largest corn supplier, has begun boosting corn-ethanol production after President George Bush called in January for greater ethanol use to help reduce U.S. oil dependence. “China should become more self-sufficient in corn supply, as the global corn trade is expected to decline,” Mengshan Cheng, a top officer with the Ministry of Agriculture, said.

China is the world’s third largest ethanol fuel producer after Brazil and the United States, with an annual output of around 3 billion liters. Ethanol-blended gasoline (mostly 10 percent ethanol and 90 percent gasoline) is currently sold in five provinces and 27 cities, but the government plans to increase its use from 20 percent of total fuel consumption to more than half by 2010.

The National Development and Reform Commission (NDRC), China’s top economic planning body, suspended further expansion of corn-based ethanol industries last year and is instead encouraging the use of non-grain feedstock, such as cellulose, to produce biofuels.

China Watch is a joint initiative of the Worldwatch Institute and Beijing-based Global Environmental Institute (GEI) and is supported by the blue moon fund.