Projecting China's Ag Imports: Differing Opinions

China projected that its imports of farm commodities will decline over the next decade, the mirror image of USDA predictions that China's imports will keep growing. 

China's Academy of Agricultural Sciences (CAAS) and USDA both release 10-year projections of Chinese agricultural supply and demand at their outlook conferences each year. USDA released its projections to 2033/34 for China (and for all other countries) at the USDA Agricultural Outlook Forum in February. USDA projections are available online. CAAS released its projections this week at the Ministry of Agriculture and Rural Affairs China Agricultural Outlook meeting in Beijing.

CAAS's projections were predictably bullish on China's grain production outlook. CAAS predicts that grain output will rise from 695 million metric tons last year to 704 million metric tons in 2024 and to 766 million metric tons in the 2033/34 marketing year. The 71-million-ton increase would easily meet China's target of increasing grain production capacity by 50 million metric tons.  

China's projections imply steady area planted in grain, so gains in grain output will be achieved by raising yields. CAAS expects growth in grain yields to accelerate. CAAS projects that grain yields will grow 585 kg per hectare (10 percent) over the next 10 years, faster than the cumulative 469-kg growth over the last decade. This projection goes against the general pattern of decelerating growth of crop yields around the world.

Projected by Chinese Academy of Agricultural Sciences, April 2024.

CAAS said the "tight balance between supply and demand" in grain will continue, but "pressure will ease." Imports will fall and China will attain 91.5 percent self-sufficiency in grain by 2033.

CAAS is confident that policies designed to reduce reliance on imported soybeans will work. CAAS expects soybean output to increase at a blistering annual rate of 6.4 percent over the next decade as both area and soybean yields grow at a robust pace. CAAS expects soybean use in China to barely change over the next 10 years. CAAS projects a decrease in soybean imports from near 100 million metric tons in 2023/24 to just 78.7 million metric tons in 2033/34--reverting to the volume imported in 2014. In contrast, USDA projected that China's soybean imports will grow to 138.3 million metric tons in 2033/34.

Projected by USDA and Chinese Academy of Agricultural Sciences in 2024.

China and U.S. projections of China's corn imports also diverge. CAAS projected that China's corn imports will drop dramatically in the next 2 years and eventually fall to 6.8 million metric tons in 2033/34. USDA projected a gradual increase in corn imports to 26 million metric tons in 2033/34.

Projected by USDA and Chinese Academy of Agricultural Sciences in 2024.

CAAS projects that wheat imports will fall to 4.85 million metric tons in 2033/34, while USDA projects 9.67 million metric tons. CAAS projects rice imports of 3 million metric tons in 2033/34, while USDA projects 4.4 million metric tons. 

CAAS expects pork production to remain steady at a "reasonable level" while poultry output grows 1.7 percent annually, beef output grows 1 percent annually, and sheep meat grows 1.2 percent. Milk output is projected to grow at a rapid 4.1 percent annual rate, and aquaculture output will grow just 0.9 percent. 

According to CAAS, China will succeed in diversifying the sources of its agricultural imports and will progress in "high-level" opening of its economy with continued growth in agricultural trade. 

CAAS expects agricultural prices to be on a rising trend. This point seems meant to reassure Chinese producers with rising production costs that they will be able to maintain their profit margins. CAAS asserted that the linkage between Chinese and international agricultural commodity prices will weaken as China expands its domestic output. This is wishful thinking intended to assert China's independence from American commodity markets and to assert China's role as an "agricultural power"--a theme of last year's China outlook conference. 

In fact, the linkage between Chinese and international prices seems to be strengthening. Weak corn, wheat and soybean prices due to diminishing impacts of the 2022 Ukraine invasion spike and Brazil's exporting of commodity price deflation are being felt in Chinese markets. Conversely, strong Chinese rice prices reflect a tighter international rice market after India's restraint of exports last year.