China will face a 500,000-ton deficit in corn production this year, according to the latest report from China National Grain and Oils Information Center.

The prediction looks set to bring a two-year production surplus to an end after the country ended years of deficit in 2004.

The center forecast that annual corn consumption for 2006-2007 would reach 144.5 million tons, but corn output would be 144 million tons.

The corn price on the global market surged to a ten-year high last month as a result of soaring demand in the United States for an ethanol fuel boom.

Supply in China has continued to increase as farmers choose to plant corn and reduce the amount of soybean and other crops.

However, due to the expansion of the corn processing industry, which uses corn to produce alcohol and starch, domestic demand has also boomed, observers said.

China ranks the world's second largest corn producer after the United States, accounting for 20 percent of the world's production.

Source: Xinhua