08/02/10 Gaithersburg, Maryland – As we talked about before, China is now a net importer of corn for the first time ever. The chart is stunning:
As you can see, China used to export millions of tons of corn every year. No longer. That’s a potential big catalyst for corn producers. Also, the chart to the right of that shows you China’s climbing imports of soybeans. This, too, is a commodity that China used to export. Needless to say, China is a big market with a lot of mouths to feed. So if China is now regularly coming to, say, the corn market as a buyer, where it once was a seller, that’s a tectonic shift.
Another chart was about India, another big market. It shows you how prices for food have risen sharply and how Indian crop yields — in this case for rice — trail those of the rest of the world.
One way to make up that difference is to apply more fertilizer. Fertilizer use in India is below recommended levels, so it will be another big market. China may be the largest market for fertilizers and is further along than India. But as India catches up, that’s a lot of potential potash.
Chris Mayer
for The Daily Reckoning
Chris Mayer
Chris Mayer is managing editor of the Capital and Crisis and Mayer’s Special Situations newsletters. Graduating magna cum laude with a degree in finance and an MBA from the University of Maryland, he began his business career as a corporate banker. Mayer left the banking industry after ten years and signed on with Agora Financial. His book, Invest Like a Dealmaker, Secrets of a Former Banking Insider, documents his ability to analyze macro issues and micro investment opportunities to produce an exceptional long-term track record of winning ideas. In April 2012 Chris will release his newest book World Right Side Up: Investing Across Six Continents.
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