The January 2018 China Agricultural Supply and Demand Estimates (CASDE) explained that farmers in the northeastern provinces have been holding back corn in anticipation of rising prices. The influx of cash from corn producer subsidies recently distributed allowed them to pay back loans without having to sell corn to generate cash; this allowed them to hold on to their corn longer. However, CASDE says the national average wholesale corn price is expected to remain stable at 1600-1700 yuan/mt, "constrained by high inventories."
An MOA news conference on the 2018 outlook for agricultural markets pronounced that the de-stocking of excess corn inventories and price-stabilization had surpassed expectations last year. In late December the average price of corn in northeastern provinces was 1580 yuan/mt, up 7.3 percent from the fourth week of October and 16.9 percent higher than a year earlier. In the north China plain the average corn price was 1660 yuan/mt, up 2.4 percent from late October and up 4.3 percent from a year earlier.
MOA agrees that corn looks profitable, but officials warned farmers not to "blindly" expand planting of corn this spring. They warned that there is little room for further increases in corn prices ahead of the Chinese Spring Festival holiday in February. Officials say changes in the corn markets are one of four topics to focus on in 2018, and they called for local officials to continue urging farmers to switch from corn to minor grains and beans in marginal production regions as spring planting arrives.
China corn supply and demand (Ministry of Ag, Jan 2018) | |||||
Item | Unit | 2016/17 | 2017/18 Nov | 2017/18 Dec | 2017/18 Jan |
Planted area | 1000 ha | 36,768 | 35,100 | 35,445 | 35,445 |
Harvested area | 1000 ha | 36,768 | 35,100 | 35,100 | 35,100 |
Yield | Kg/ha | 5,971 | 5,986 | 6,091 | 6,091 |
Production | MMT | 219.55 | 210.11 | 215.89 | 215.89 |
Imports | MMT | 2.46 | 1.50 | 1.00 | 1.20 |
Consumption | MMT | 210.72 | 215.62 | 220.96 | 220.96 |
--Food | MMT | 7.82 | 7.89 | 7.89 | 7.89 |
--Feed | MMT | 133.03 | 135.03 | 138.35 | 138.35 |
--Industrial use | MMT | 58.25 | 61.3 | 63.3 | 63.3 |
--Seed | MMT | 1.61 | 1.5 | 1.59 | 1.59 |
--Loss and other | MMT | 10.01 | 9.83 | 9.83 | 9.83 |
Exports | MMT | 0.08 | 0.3 | 0.5 | 0.5 |
Surplus | MMT | 11.21 | -4.31 | -4.57 | -4.37 |
(Last year, CASDE ignored the National Bureau's higher estimate of 2016/17 corn production for about five months. This year CASDE adopted the Bureau's official estimate the same month it was announced.)
Ministry of Agriculture officials seem vexed by low international prices for corn and soybeans. At the MOA press conference, the director of economic information observed that low prices in international markets have been putting increasing pressure on Chinese grain and oilseed markets. CASDE notes that global corn supplies are abundant, and the C&F price of U.S. corn arriving at Chinese ports is 1550-1650 yuan/mt, down 100 yuan from the previous month and the lowest in two years, CASDE said. CASDE raised its estimate of corn imports based on strong demand.
CASDE's soybean analysis also cited downward pressure on U.S. soybean futures prices due to expectations of a big harvest in South America. The average C&F price of imported soybeans is 3050-3250 yuan/mt, while the average price of domestic soybeans is 4175-4375 yuan/mt. Estimated 2017/18 imports remained at 95.97 mmt. A slight reduction in domestic soybean production was the only change in CASDE's soybean balance sheet.
China soybean supply and demand (Ministry of Ag, Jan 2018) | ||||
Item | Unit | 2016/17 | 2017/18 Dec | 2017/18 Jan |
Planted area | 1000 ha | 7,208 | 8,194 | 8,099 |
Harvested area | 1000 ha | 7,202 | 8,194 | 8,099 |
Yield | Kg/ha | 1,796 | 1,817 | 1,802 |
Production | MMT | 12.94 | 14.89 | 14.6 |
Imports | MMT | 93.49 | 95.97 | 95.97 |
Consumption | MMT | 108.11 | 110.56 | 110.56 |
--Crushing | MMT | 92.90 | 94.38 | 94.38 |
--Food | MMT | 11.18 | 12.04 | 12.04 |
--Seed | MMT | 0.64 | 0.64 | 0.64 |
Loss and other | MMT | 3.39 | 3.5 | 3.5 |
Exports | MMT | 0.12 | 0.22 | 0.22 |
Surplus | MMT | 0.01 | 0.08 | -0.21 |
CASDE raised its estimate of 2017/18 cotton output to 5.64 mmt (slightly higher than the National Bureau of Statistics December estimate of 5.49 mmt). CASDE raised estimated cotton imports to 1.1 mmt. CASDE estimates that cotton stocks will fall from 8.75 mmt to 7.27 mmt during 2017/18.
China cotton supply and demand (Ministry of Ag, Jan 2018) | ||||
Item | Unit | 2016/17 | 2017/18 Dec | 2017/18 Jan |
Begin inventory | MMT | 11.11 | 8.75 | 8.75 |
Planted area | 1000 ha | 3,100 | 3,293 | 3,293 |
Yield | Kg/ha | 1,555 | 1,662 | 1,714 |
Production | MMT | 4.82 | 5.47 | 5.64 |
Imports | MMT | 1.11 | 1.00 | 1.10 |
Consumption | MMT | 8.09 | 8.22 | 8.22 |
Exports | MMT | 0.01 | 0.01 | 0.01 |
End Inventory | MMT | 8.94 | 7.00 | 7.27 |
China edible oils supply and demand (Min Agriculture, Jan 2018) | ||||
Item | Unit | 2016/17 | 2017/18 Dec | 2017/18 Jan |
Production | MMT | 27.36 | 27.81 | 27.82 |
--Soy oil | MMT | 16.27 | 16.51 | 16.5 |
--Rapeseed oil | MMT | 5.74 | 5.71 | 5.71 |
--Peanut oil | MMT | 3.18 | 3.26 | 3.26 |
Imports | MMT | 5.78 | 6.28 | 6.03 |
--Palm oil | MMT | 3.34 | 3.75 | 3.85 |
--Rapeseed oil | MMT | 0.8 | 0.85 | 0.85 |
--Soy oil | MMT | 0.71 | 0.65 | 0.3 |
Consumption | MMT | 31.68 | 31.9 | 31.9 |
--Urban | MMT | 22.97 | 23.4 | 23.4 |
--Rural | MMT | 8.71 | 8.5 | 8.5 |
Exports | MMT | 0.17 | 0.17 | 0.17 |
Surplus | MMT | 1.29 | 2.01 | 1.78 |
China sugar supply and demand, January 2018 | ||||
Item | Unit | 2016/17 | 2017/18 Dec | 2017/18 Jan |
Planted area | 1000 ha | 1396 | 1456 | 1456 |
--sugar cane | 1000 ha | 1225 | 1267 | 1267 |
--sugar beets | 1000 ha | 171 | 189 | 189 |
Yield | ||||
--sugar cane | MT/ha | 61.8 | 60 | 60 |
--sugar beets | MT/ha | 55.2 | 52.5 | 52.5 |
Sugar output | MMT | 9.29 | 10.35 | 10.35 |
--sugar cane | MMT | 8.24 | 9.15 | 9.15 |
--sugar beets | MMT | 1.05 | 1.2 | 1.2 |
Imports | MMT | 2.29 | 3.2 | 3.2 |
Consumption | MMT | 14.9 | 15 | 15 |
Exports | MMT | 0.12 | 0.07 | 0.07 |
Surplus | MMT | -3.44 | -1.52 | -1.52 |
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