A surge in global and Chinese demand would deplete stock levels and drive a clash between the soyabean and corn sectors, AgriCensus quoted Bunge’s former CEO Soren Schroder as saying in a report on 18 November.

Following eight years of global surpluses and limited market volatility, the agriculture sector was “back in a powerful way” and was set for firm prices on tight stocks due to a shift in demand from China, Shroder said during an online interview for the Global Grains Geneva conference.

“Corn and soyabeans are set up for several years of a very dynamic tug of war between soyabean acreage and corn acreage. It will be more than one growing season to get back to a surplus,” he said.

Strong global demand, not only driven by China, with marginal reductions in output levels had caused world stock levels to shrink, he said.

“The combination of all of this has put us in this very tense supply and demand carry-out situation in corn and soyabeans and most oilseeds,” he added.

Scroder explained how quickly China’s economy had been able to rebound from COVID-19 and how it had rebuilt its pig herd following the African swine fever (ASF) outbreak.

That dynamic had boosted Chinese import demand for soyabeans and corn, he said, while stocks of corn in China were expected to be lower than had been originally reported.

“Chinese corn demand is structural, it is real, is not just a function of the US Phase One trade agreement, it just happens to coincide,” he said.

China was expected to import around 25-35M tonnes/year of corn as long as surging price levels did not bring demand rationing, he said.

“That means we have to tap into another 3-5M ha of land somewhere in the world, on top of the ongoing 4-5M ha that the world needs outside of China to fill the ever-growing demand.”