The Influence Of The Change Of World Corn Export Market Patterns On The Source Structure Of China's Corn Imports

In the global grain trade corn is the second cereal after wheat.In the 19^th century,China was considered to be one of the top exporters of this kind of grain.In the 21^st century,the country became a net importer and stopped its exports performance.This dramatic change happened due to several reasons,namely lack of sawn areas for grain cultivation,lack of support from the government,comparatively high prices on domestic and international markets,uneven contamination of the agricultural lands.Meanwhile,the consumption of the product was gradually rising.It was not only as a cereal or input for the products serving dietary purposes but also widely used in industrial&animal feed spheres and for pharmaceutical final products.Today,more than a half of total corn consumed goes to animal feed.However,the amounts of corn for dietary consumption increased after the growth of urban population and increasing buying ability of the consumers in the mega policies.With the modernization of industries and medicine,corn appeared as much required input for new final goods,like fuel ethanol and industrial alcohols.In 19^th–20^thh century,China was supplying large quantities of the product on the domestic market,mainly due to the government support of local agriculture.With accessing the World Trade Organization,agriculture was no longer a sphere of concentration regarding China's macroeconomic policy.Initially,the natural resources for agricultural production could not supply the required amounts within the country.Geographically,the domestic production was executed by the Northern provinces with high shipping spending for the transportation to the South.The final price for the product was not competitive on the domestic market.To make the matters worse,under the new WTO requirements,Chinese government applied more strict quality standards for the product and canceled earlier existing subsidies for the domestic production.Therefore,farmers remaining in agriculture abandoned growing corn and shifted to the other more profitable goods.Some of the agrarians abandoned rural areas for other more profitable jobs in big cities.Since China was not able to cover domestic consumption of the grain,it started using the production capacity of other countries.The country used the membership in the World Trade Organization to make further agreements with other countries supplying the grain.The first country performing export with China was the United States.USA had the capacity to cover the requested amount from the Asian partner.The purpose of this thesis is to investigate export fluctuations of the different corn exporting countries over the time starting from 1993 and to explain the rising imports of corn from the emerged countries to China after 2005.We track the export and imports patterns between traditional exporting countries,like the USA and new exporting countries.The developing imports from the new source countries,in our opinion,to the largest extent,can be represented by the example of Sino-Ukrainian trade relationships.Being separated from the USSR since 1992,Ukraine had a great agricultural potential,which it is successfully using now.We target to show this using more accurate statistics approach.To conduct our research,we used the literature review of China's,Ukraine's and world sources,the empirical study based on UN Commodity Trade Database and the case issue showing falling imports from the USA to China,followed by a large number of corn purchased from Ukraine.Using secondary data collection we came up with the case of Ukraine performing as the largest corn importer for China,whereas the USA?regarded as a top corn exporter?remains back starting from the beginning of the 21^st century.As a background,in our research,we regard the exporting countries,as traditional and new exporters.To conduct this research,we chose the combination of the research methods.In the empirical part,we calculate the export patterns of the global market participants and the performance of main importers on China's corn market.Using the time period of 1993–2015,the imports of corn to China is shown from the two methodological approaches.We name the two parts,as a consistency model and a source diversification model.The first one is aimed to show the concentration of the import markets in China and the behavior of the 10 countries chosen in our research,namely USA,Argentina,France,Brazil,Hungary,India,Paraguay,Ukraine,Serbia,South Africa in terms of the world export market.We took the annual export numbers gathering the data about these countries in order to make an inference that can be generalized to the general tendency of the imports from these countries with different patterns between the two groups under our investigation.It was concluded,that because of the natural inputs and insufficient agricultural policy conducted by the countries domestically,China and North America lost the leadership on corn export market in1992–2016,whereas Black Sea countries and EU countries made a great leap in corn export.Further,we show the conformation of the import countries with the dynamic change of corn export.The second empirical part is calculated using 4 aspects of uniformity?4 indexes?designed to show the contamination,diversity,and complexity of the of China's imports source structure.It also shows the imports share of different countries.Further,we proceed with the case study to show the breakthrough of the new countries on the export market.These are European Union countries,South Africa,Ukraine and other market participants of the Black Sea region.In this research,we consider Ukraine,as a proxy partner of China among the emerged import sources.As a result,if in1993–2007 imports were represented by USA,Argentina,and other traditional exporters,in 2008–2015 imports were,to the large extent,executed by Ukraine,South Africa and Serbia.By now,China retains the United States,as one the main sources of corn.Through the study of the import patterns of a certain number of the source countries,we refer to the deductive approach.We start the investigation from the overview of the whole imports structure and proceed with the imports of certain participants that are under research,emerged and traditional countries.Further,we focus on the trade relationships between Ukraine and China as an example of the commodity exchange performed with the new exporting country.Earlier,after the dissolution of the USSR,Ukraine improved its export market power in terms of agriculture due to the favorable agricultural inputs,like the black soil and mild climate.The financial assistance he industry was provided by the government and private financial organizations within the country.After the conducted research,in the empirical part we derived,that the imports share of the emerged countries increased over the traditional?ex.USA,India,Argentina?.New countries are becoming more competitive in the export market and obtain more market power than over two decades before.Using compliance indexes,we conclude,that China does not conform to the corn export market pattern.The country continues importing the large amounts from traditional sources,like the USA,using import from the new sources,like Ukraine&Serbia at the same time.The amounts imported by China and volumes of corn exported on the export market from the countries under our research show different tendencies.China's corn import and global exports do not mutually correlate,which automatically increases China's corn imports market risk.After import structure analysis,it was found,that the concentration and diversification of China's imports market are declining over the time,meaning that the country is becoming dependable on fewer countries,increasing vulnerability for the domestic market.The structure of China's corn imports should be optimized by increasing imports from new exporting countries rather than continuing imports from a small number of traditional exporting countries.The breaking point of developing trade cooperation with emerged exporting countries can be imported from Ukraine which in 2016exceeded the USA in terms of corn imports and became the first source country on China's trade market.Using the established relationships with the country,China should search for additional alternative corn imports sources in order to diversify market structure and decrease potential market risks.After the conducted investigation,we conclude on the fact,that China's corn imports market does not conform to the dynamic change of the export market.The corn imports of the country are still much dependable on the United States.In order to optimize the import market structure,eliminate import market risk,guarantee the availability of the volumes of the corn required annually and reduce the reliability of the limited number of supplying countries,it is suggested to increase imports from the alternative new countries that appeared on the global corn export market and develop the recently develop trade relationship with Ukraine dealing with the exchange of other commodities,like sunflower seeds,milk powder,beef and pork.With this thesis,using the empirical calculations followed by the example in the case study part,we will fill in the research gap.However,the further works on more types of commodities exchanged between China and the emerged countries can be potentially investigated in order to develop more fruitful cooperation for both sides and cover the domestic requirements of China and the foreign trade partner.