Smaller than normal grain crops in several countries in recent years and high prices have made markets sensitive to changes in volumes of exports and imports. Recent reports of China buying wheat and rice and weather problems for the Chinese wheat crop have been noted by analysts. Based on current data, the purchases and weather conditions bear watching for any policy changes.
Chinese wheat production for the 2012/13 marketing year (七月 1, 2012 to June 30, 2013) is estimated by the Foreign Agricultural Service (FAS) of USDA at 120.6 百萬公噸 (蒙脫土), 從 117.4 MMT在 2011/12 å’Œ 115.2 MMT在 2010/11. Total domestic consumption is projected at 123.0 MMT在 2012/13, up only 0.5 MMT從 122.5 在 2011/12, but up 12.5 MMT從 110.5 MMT在 2010/11. In two years China has gone from producing 4.7 MMT more wheat than it consumed to consuming 2.4 MMT more than it produced.
According to FAS estimates, the big change has come from wheat consumed as livestock feed, increasing from 10.0 MMT在 2009/10 å’Œ 13.0 MMT在 2010/11 to 23.0 MMT在 2011/12 å’Œ 24.0 MMT在 2012/13. That implies that annual food use increased only 3.0 million metric tons over the last three marketing year from 97.0 MMT在 2009/10 to 100.0 MMT在 2012/13. Chinese imports increased from 1.4 MMT在 2009/10 å’Œ 0.9 MMT在 2010/11 to 2.9 MMT在 2011/12 and a projected 3.0 MMT在 2012/13. Those imports are low compared to 3.7 MMT在 2003/04 å’Œ 6.7 MMT在 2004/05 when feed use was only 6.0 MMT and 4.0 蒙脫土, respectively.
The increased wheat feeding has occurred at a time of high corn prices due to short corn crops in the U.S., the world’s largest exporter. China imported 1.3 MMT of corn in 2009/10 å’Œ 1.0 MMT在 2010/11. Corn imports increased to 5.2 MMT在 2011/12 and are projected at 2.0 MMT用于 2012/13. Imported wheat from Australia and domestic feed wheat were lower-priced substitutes for imported corn. A normal corn crop in the U.S. 在 2013 should reduce wheat feeding in China.
The recent purchases from the U.S. and Canada are reportedly for hard red winter and hard red spring high-protein wheat. Those supplies will likely be blended with Chinese domestic wheat to improve the baking quality of flour. Weather and soil conditions can influence the protein content of wheat and it is normal to blend wheat to achieve particular baking characteristics. The Chinese are using good management to shift domestic wheat to livestock feed and importing wheat to maintain specific gluten and protein requirements. There appears to be no change in their goal of striving for 100 percent self-sufficiency in wheat.
Most of China’s wheat, 93 百分比, is winter wheat that is planted in the fall, usually October, and begins growing before going dormant in the winter months. It is at risk in winter from cold weather if not protected by snow. This winter is reported to be the coldest in China in 28 å¹´. Winter months are usually dry, and the crop is at risk to damage when the crop breaks dormancy in late winter and early spring if soil moisture is short. Irrigation is available in many of the wheat growing provinces. Almost every winter the grain trade and government officials go through a period of worry about the Chinese wheat crop.
Chinese rice production for the 2012/13 marketing year is projected by FAS to be a record 143.0 MMT on a milled basis, 從 140.7 MMT在 2011/12 å’Œ 137.0 MMT在 2010/11. Consumption for 2012/13 is projected at 144.0 蒙脫土, exceeding production by 1.0 蒙脫土, a change from the last four years when production exceeded consumption. Consumption was only 127.2 MMT as recently as 2006/07. China imported 2.6 MMT of rice in 2011/12 and is projected to import 2.0 MMT在 2012/13. China is expected to export 0.5 MMT of rice in 2012/13, close to the recent annual average after exporting only 0.26 MMT在 2011/12.
美國. agricultural attaché in China has been reporting that Vietnamese and Pakistani rice is cheaper to import than utilizing domestic production. The government minimum purchase price for rice farmers has increased 40 percent from 2009 to 2012. Tariff rate quotas (TRQs) for rice of 5.32 MMT per year are required under China’s accession agreement to join the WTO, and half of the TRQs are allocated to private traders who have used them to import rice. State-owned TRQs are not likely to be used since government-held stocks are considered to be adequate. Some Thai fragrant rice is also imported for use in hotels and restaurants in affluent coastal cities.
Rice is a critical staple crop in China with estimates that 60 percent of the people eat some rice daily. The government’s goal is to strive for 100 percent self-sufficiency as it is for wheat. Area harvested in 2012/13 係 30.3 million hectares and has been on a slow increase after bottoming out in 2003/04 ä¿‚ 26.5 million hectares when imports were 1.1 蒙脫土. Imports also exceeded 1.0 MMT在 1994/95 when imports were 2.0 蒙脫土. Yield per hectare has slowly increased from 5.64 MT per hectare in 1991 to 6.74 MT per hectare in 2012. Almost all rice is irrigated and yields do not vary much year to year. Large government reserves of rice are held, but the amount is not reported publicly. FAS projects stocks at 45.9 MMT for the end of 2012/13, 從 45.0 MMT a year earlier and a continuation of an upward trend that began at 35.9 MMT at the end of the 2006/07 marketing year. Ending stock will be at 31.9 percent of consumption for 2012/13.
For 2012/13 åª 8 百分比, 37.4 蒙脫土, of global rice production of 465.6 MMT is expected to move in world trade. With the higher Chinese imports for last year and this year, the average world trade in rice for the two years is not larger than for the average of 2009/10 å’Œ 2010/11. World ending stocks for 2012/13 of 102.5 MMT will be down 3.0 MMT from last year, but up from 98.7 MMT在 2010/11.
近年來, Chinese purchases of agricultural commodities have been market movers. Imports for the last two years in wheat and rice have been a break from the pattern for the previous few years, but consistent with a large grain consuming country drawing on international trade to meet the changing wants of consumers. The markets would be more comfortable with this trade if the Chinese government was more open about the amount of grain stocks held and any changes that may occur in government policies with respect to grain imports.
Ross Korves is an Economic Policy Analyst with Truth About Trade & 技術 (www.truthabouttrade.org).