Monday, October 10, 2016

China MOA S&D Estimates (Oct 2016)

China's corn supply will exceed its consumption by 4 mmt during 2016/17, according to the October China Agricultural Supply and Demand Estimates (CASDE) published by the Ministry of Agriculture. The estimated surplus is down from last month's estimate of 8 mmt. The CASDE report estimates that the corn surplus was a whopping 33.7 mmt during the just-completed 2015/16 and 37.8 mmt during 2014/15.

CASDE cut its estimate of China's 2016/17 corn crop by 3 mmt due to poor yields and lodging in some parts of China's northeastern provinces. The estimate of 212.45 mmt for 2016/17 is down from 224.58 mmt for 2015/16. Imports were revised down to 3.2 mmt for 2015/16 and 1.8 mmt for 2016.17. CASDE has revised 2015/16 imports downward each month, from 4.6 mmt in July to 3.2 mmt in October, as de-stocking of corn from government stockpiles this summer displaced imports. The estimate of imports for 2016/17 has been adjusted down from 2.4 mmt during July-August to 2 mmt in September, and 1.8 mmt this month. The estimate of corn consumption was raised by 600,000 metric tons this month.

China corn supply and demand (Ministry of Agriculture, October 2016)
Item Unit 2015/16 2016/17
Planted area 1000 ha 38,117 36,026
Harvested area 1000 ha 38,117 35,990
Yield Kg/ha 5892 5903
Production MMT 224.58 212.45
Imports MMT 3.2 1.8
Consumption MMT 194.05 209.57
--Food MMT 7.65 7.72
--Feed MMT 121.01 133.48
--Industrial use MMT 54.17 56.95
--Seed MMT 1.66 1.61
Loss and other MMT 9.56 9.81
Exports MMT 0.01 0.50
Surplus MMT 33.72 4.18

Soybean supply and demand estimates changed only slightly this month. The yield was revised downward 0.5% due to effects of drought in the northeast. The estimated production of 12.5 mmt for 2016/17 is still 890,000 metric tons more than last year. Crushing consumption is estimated to rise to 84 mmt, and imports are estimated at 83.5 mmt.

China soybean supply and demand (Ministry of Agriculture, October 2016)
Item Unit 2015/16 2016/17
Planted area 1000 ha 6,590 7,156
Harvested area 1000 ha 6,590 7,150
Yield Kg/ha 1,762 1,748
Production MMT 11.61 12.50
Imports MMT 81.42 83.50
Consumption MMT 94.76 98.20
--Crushing MMT 81.00 84.00
--Food MMT 10.35 11.18
--Seed MMT 0.54 0.56
Loss and other MMT 2.87 2.46
Exports MMT 0.11 0.20
Surplus MMT -1.84 -2.40

The gradual de-stocking of cotton continues in 2016/17. Cotton stocks peaked at 12.8 mmt at the end of 2014/15 and are estimated to fall from 11.13 mmt to 9.35 mmt during 2016/17. Production is estimated at 4.78 mmt for 2016/17, but consumption is estimated at 7.5 mmt. Imports will make up less than 1 mmt of the gap between production and consumption. Thus, CASDE says de-stocking of government reserves will be a major part of the cotton supply. 
 
China cotton supply and demand (Ministry of Ag, October 2016)
Item Unit 2015/16 2016/17
Begin inventory MMT 12.8 11.13
Planted area 1000 ha 33 31
Yield Kg/ha 1,510 1,544
Production MMT 4.93 4.78
Imports MMT 0.96 0.97
Consumption MMT 7.54 7.52
Exports MMT 0.02 0.02
End Inventory MMT 11.13 9.35

CASDE sees edible oils supply and demand relatively stable. 

China edible oils supply and demand (Ministry of Agriculture, October 2016)
Item Unit 2015/16 2016/17
Production MMT 25.03 25.33
--Soy oil MMT 14.44 14.88
--Rapeseed oil MMT 5.63 5.37
--Peanut oil MMT 3.01 3.16
Imports MMT 5.58 5.4
--Palm oil MMT 3.42 3.2
--Rapeseed oil MMT 0.74 0.75
--Soy oil MMT 0.65 0.58
Consumption MMT 31.17 31.38
--Urban MMT 20.41 20.55
--Rural MMT 10.76 10.83
Exports MMT 0.11 0.13
Surplus MMT -0.66 -0.77

Sugar reserves were drawn down by 3.16 mmt during 2015/16 and will decline a further 1.7 mmt during 2016/17. The slower decline in reserves reflects an increase in production. Consumption is forecast to decline slightly while imports remain stable. 

China sugar supply and demand (Ministry of Ag, October 2016)
Item Unit 2015/16 2016/17
Planted area 1000 ha 1435 1433
--sugar cane 1000 ha 1301 1270
--sugar beets 1000 ha 134 163
Yield
--sugar cane MT/ha 60.75 60.00
--sugar beets MT/ha 48.00 48.75
Sugar output MMT 8.7 9.9
--sugar cane MMT 7.85 8.85
--sugar beets MMT 0.85 1.05
Imports MMT 3.5 3.5
Consumption MMT 15.2 15.1
Exports MMT 0.16 0.07
Surplus MMT -3.16 -1.77

The Ministry of Agriculture anticipates a decrease in domestic corn prices to 1500-1600 yuan/metric ton, a 14-20-percent decline from the 2015/16 average. They expect international prices to rise slightly, so that domestic corn prices in production areas will be less than the price of imported corn. The Ministry expects lower prices for imported soybeans in 2016/17. A huge gap between domestic and imported soybean prices will widen to about 1300 yuan/mt. 

China prices
(Yuan/metric ton)
2014/15 2015/16 2016/17
Corn
Production region wholesale 2266 1870 1500-1600
Imported corn + duties 1643 1598 1600-1700
Soybeans
Domestic soybeans, consumption regions 4675 4300 4350-4550
Imported soybeans + duties 3265 3215 3050-3250




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