BEIJING, April 12 (Reuters) - China may cancel corn shipments from Europe following cancellations of Ukrainian corn orders to ease supply pressure on the domestic market, China Grain Net, an information provider affiliated with state stockpiler Sinograin, said on Friday.
Buyers have already cancelled shipments of Ukrainian-origin animal feed corn totalling several hundred thousand metric tons for April/May shipments, traders said on Thursday.
"China's domestic corn prices have hovered near more than three-year lows as imports have surged and demand from the domestic feed industry have weakened," China Grain Net said in a note.
The cancellations will help support domestic corn prices ahead of the spring planting season. China hit a record corn crop of 288.84 million tons last year and aims to further raise production.
The world's second largest corn grower has set a quota for corn imports at 7.2 million tons in 2024, after which cargoes are subjected to higher duties.
Some companies avoid the higher tariffs by processing imported corn into animal feed at processing facilities within bonded zones, a trader who declined to be named said.
China Grain Net said local authorities have asked traders and processors not to build new feed-mixing facilities in the bonded zones and to keep the amount of overseas corn delivered to the zones below last year's level.
"Some importers have already booked too much corn, leading to the recent cancellation of import orders," it said.
China's corn imports in the first two months of 2024 have already risen 16% from a year ago to 6.19 million tons.
The Agriculture Ministry on Thursday said China's corn imports have been at a high level so far this year and raised its forecast for imports during the 2023/24 season ending in September to 20 million tons.
China cancelled purchases of about 1 million tons of Australian wheat and 500,000 tons of U.S. wheat largely because of falling prices and a slower rate of economic growth, traders said in March.
Brazil is China's largest corn supplier, followed by the United States. (Reporting by Mei Mei Chu; Editing by Josie Kao)
