China MOA S&D Estimates (Mar 2017)

China Ministry of Agriculture's supply and demand estimates (CASDE) for March 2017 were unchanged from the previous month except for a small reduction in the 2016/17 sugar production estimate.

Corn has been major a agricultural talking point for officials this week at the National Peoples Congress in Beijing: the necessity of allowing corn prices to fall, the need to get supply aligned with demand, and the monumental task of whittling away the corn reserves. The CASDE led off with a similar review of this year's corn supply and demand numbers, noting that the reduction in corn production in 2016/17 and the rebound in feed and industrial use will close the gap between corn supply and demand. The CASDE estimates would result in a further increase in corn reserves of 4.4 million metric tons during 2016/17. The CASDE authors observed that feed consumption is currently restrained by effects of avian influenza and low swine inventories, but they did not change their feed consumption estimate for 2016/17. The 2016/17 corn import estimate is unchanged from last month at 800,000 metric tons, down from 3.2 million metric tons in 2015/16.

China corn supply and demand (Ministry of Ag, March 2017)
Item	Unit	2015/16	2016/17 Feb	2016/17 Mar
Planted area	1000 ha	38,117	36,026	36,026
Harvested area	1000 ha	38,117	36,021	36,021
Yield	Kg/ha	5,892	5,978	5,978
Production	MMT	224.58	215.33	215.33
Imports	MMT	3.2	0.8	0.8
Consumption	MMT	194.09	211.22	211.22
--Food	MMT	7.65	7.82	7.82
--Feed	MMT	121.01	133.53	133.53
--Industrial use	MMT	54.17	58.25	58.25
--Seed	MMT	1.66	1.61	1.61
Loss and other	MMT	9.56	10.01	10.01
Exports	MMT	0.01	0.5	0.5
Surplus	MMT	33.73	4.41	4.41

Separately, Minister of Agriculture Han Changfu led off an interview with China's Central Television yesterday with the "hot topic" of corn. He stressed the importance of the 30-million-mu (2 million ha) decline in corn planting in 2016 for restoring equilibrium between supply and demand, and he said they hope for a further 10-million-mu (667,000 ha) reduction in corn planting in 2017. The Minister recommended that farmer friends plant whatever is profitable, but cautioned against piling into new crops (i.e. creating new surpluses of other commodities).

The CASDE noted that grain bureau statistics showed that 75 mmt of corn from the 2016 harvest had been procured in northeastern provinces as of February 28, 2017. This was lower than a year ago, but comparable to earlier years. They expect corn prices to remain steady.

Soybean estimates are also unchanged from February. CASDE expects imports to reach 85.31 mmt for 2016/17. The soybean write-up also mentions impact of avian influenza and low hog numbers on feed demand but did not change its estimated 85.5-mmt crush volume for 2016/17. More domestic soybeans are moving out of the northeast as transportation bottlenecks have eased and transport costs have fallen, but prices for domestic soybeans are still strong.

China soybean supply and demand (Ministry of Ag, March 2017)
Item	Unit	2015/16	2016/17 Feb	2016/17 Mar
Planted area	1000 ha	6,590	7,156	7,156
Harvested area	1000 ha	6,590	7,150	7,150
Yield	Kg/ha	1,762	1758	1758
Production	MMT	11.61	12.57	12.57
Imports	MMT	83.23	85.31	85.31
Consumption	MMT	96.67	99.87	99.87
--Crushing	MMT	82.89	85.50	85.50
--Food	MMT	10.35	11.18	11.18
--Seed	MMT	0.54	0.61	0.61
Loss and other	MMT	2.89	2.58	2.58
Exports	MMT	0.11	0.2	0.2
Surplus	MMT	-1.96	-2.19	-2.19

Cotton estimates are also unchanged this month. There is no mention of prospects for cotton auctions which have resumed after the end of the cotton procurement season. CASDE expects cotton stocks to decline by slightly less than 2 mmt in 2016/17, but the 9.13 mmt carry-out will still be 120 percent of annual consumption. Imports of cotton are estimated at just 900,000 mt this year.

China cotton supply and demand (Ministry of Ag, March 2017)
Item	Unit	2015/16	2016/17 Feb	2016/17 Mar
Begin inventory	MMT	12.8	11.11	11.11
Planted area	1000 ha	3,267	3,100	3,100
Yield	Kg/ha	1,510	1,523	1,523
Production	MMT	4.93	4.72	4.72
Imports	MMT	0.96	0.90	0.90
Consumption	MMT	7.56	7.59	7.59
Exports	MMT	0.02	0.02	0.01
End Inventory	MMT	11.11	9.13	9.13

Vegetable oil production is unchanged at 25.89 mmt. Consumption is estimated at 31.43 mmt and imports at 5.6 mmt. Rapeseed growing conditions in China are said to be favorable and similar to last year.

China edible oils supply and demand (Min Agriculture, March 2017)
Item	Unit	2015/16	2016/17 Feb	2016/17 Mar
Production	MMT	25.3	25.89	25.89
--Soy oil	MMT	14.74	15.17	15.17
--Rapeseed oil	MMT	5.6	5.61	5.61
--Peanut oil	MMT	3.01	3.18	3.18
Imports	MMT	5.81	5.6	5.6
--Palm oil	MMT	3.39	3.25	3.25
--Rapeseed oil	MMT	0.77	0.75	0.75
--Soy oil	MMT	0.59	0.58	0.58
Consumption	MMT	31.17	31.43	31.43
--Urban	MMT	20.41	21.4	21.4
--Rural	MMT	10.76	10.03	10.03
Exports	MMT	0.11	0.13	0.13
Surplus	MMT	-0.17	-0.07	-0.07

Sugar production is in its peak season, with 20 sugar cane mills in operation and most beet processors in operation. A 200,000-metric ton reduction in sugar cane output was made as farmers are holding back a larger portion of sugar cane for future production to take advantage of strong prices.

China sugar supply and demand (Ministry of Ag, March 2017)
Item	Unit	2015/16	2016/17 Feb	2016/17 Mar
Planted area	1000 ha	1423	1433	1433
--sugar cane	1000 ha	1295	1270	1270
--sugar beets	1000 ha	128	163	163
Yield
--sugar cane	MT/ha	60.3	60	60
--sugar beets	MT/ha	53.85	52.5	52.5
Sugar output	MMT	8.7	9.9	9.7
--sugar cane	MMT	7.85	8.85	8.65
--sugar beets	MMT	0.85	1.05	1.05
Imports	MMT	3.73	3.5	3.5
Consumption	MMT	15.2	15	15
Exports	MMT	0.15	0.07	0.07
Surplus	MMT	-2.92	-1.67	-1.87