China's corn demand not deterred by record prices
HONG KONG -- Corn consumption in China, the world's second-largest user, remains resilient even after prices rallied to a record in Chicago, according to DWS Investments, which invests $3.4 billion in agriculture-related businesses.
"We still have strong demand from countries like China," Bill Barbour, an investment specialist for the DWS Global Agribusiness fund, said in a Bloomberg Television interview Wednesday. "There's not been much demand destruction."
Corn, used in feeds and ethanol production, rallied 24 percent this year, reaching a record last month, as the driest summer since 1936 in the U.S. Midwest damaged crops. Barbour's assessment adds to signs that Asian nations may sustain demand for food while costs increase and economic growth slows.
There is no correlation between economic growth and food demand, said Barbour, citing U.S. Department of Agriculture data that show no declines in global demand for grains and oilseeds in recession-hit years in 2008 and 2009, and in the early 1990s.
Corn touched a record $8.49 a bushel on Aug. 10 on the Chicago Board of Trade today. Soybeans, which traded an all-time high of $17.89 a bushel Tuesday, have surged 46 percent this year, beating all other commodities on the Standard & Poor's GSCI Spot Index of 24 raw materials.