Corn prices – and with them, the price of meat – are set to explode if the latest import estimates from China are correct. China, the world’s second-largest corn consumer, probably will quintuple imports of the grain in the next five years as demand increases for livestock feed, according to the U.S. Grains Council. Last year, Beijing recorded its largest imports of corn since its disastrous crop of 1995-96. But this year could see further record purchaes. The US Grain Council reported recently that it estimates Chinese imports as high as 9m tonnes in 2011-2012, up from only 1.3m tonnes in 2010-2011.
With the cost of corn critical for the entire supply chain, high corn prices lead to higher prices for poultry, pork, lamb and beef, emerging countries that are already suffering from high inflation could be facing a more intense shock of agflation than previously thought.