The China Agricultural Supply and Demand Estimates (CASDE) for November 2017 was released Nov. 9, with few changes from the previous month. The 2016/17 corn market year is now complete, and CASDE estimates that demand exceeded supply by 11.2 million metric tons (mmt). The only change in the corn balance sheet from last month was a slight increase in imports to 2.46 mmt. In fact, over the course of the year CASDE made few changes in its corn S&D for 2016/17.
A year ago, in its November 2016 report, CASDE estimated that corn supply would exceed demand by 3.8 mmt during 2016/17. The main change since that report is the raising of its initial low-ball estimate of production (213.6 mmt) to the official output statistic of 219.55 mmt. In November 2016 CASDE forecast 2016/17 corn imports at just 1 mmt, as they thought domestic corn prices had fallen low enough to choke off import demand. Over the course of the year, CASDE ratcheted its corn import estimate upward to the current 2.46 mmt.
| China corn supply and demand (Ministry of Ag, Nov 2017) | |||||
| Item | Unit | 2016/17 Oct | 2016/17 Nov | 2017/18 Oct | 2017/18 Nov |
| Planted area | 1000 ha | 36,760 | 36,768 | 35,100 | 35,100 |
| Harvested area | 1000 ha | 36,760 | 36,768 | 35,100 | 35,100 |
| Yield | Kg/ha | 5,973 | 5,971 | 5,986 | 5,986 |
| Production | MMT | 219.75 | 219.55 | 210.11 | 210.11 |
| Imports | MMT | 2.30 | 2.46 | 1.50 | 1.50 |
| Consumption | MMT | 210.72 | 210.72 | 215.62 | 215.62 |
| --Food | MMT | 7.82 | 7.82 | 7.89 | 7.89 |
| --Feed | MMT | 133.03 | 133.03 | 135.03 | 135.03 |
| --Industrial use | MMT | 58.25 | 58.25 | 61.3 | 61.3 |
| --Seed | MMT | 1.61 | 1.61 | 1.57 | 1.5 |
| --Loss and other | MMT | 10.01 | 10.01 | 9.83 | 9.83 |
| Exports | MMT | 0.15 | 0.08 | 0.3 | 0.3 |
| Surplus | MMT | 11.00 | 11.21 | -4.31 | -4.31 |
In the coming market year 2017/18, CASDE estimates that China's corn demand will exceed its supply by 4.3 mmt. Corn production is estimated at 210.1 mmt, down 8.4 mmt from last year. Consumption for 2017/18 increases by less than 5 mmt over the previous year, driven by modest growth in both industrial and feed use. Again, CASDE has a low import number of 1.5 mmt for 2017/18. The CASDE authors anticipate that the corn market will be characterized by excess supply due to pressure from large government corn reserves and the "normalization" of auction sales. (In fact, auctions of corn from government reserves were halted in November so as not to depress corn prices as sales of the new crop move into their peak season.) CASDE left its estimate of average wholesale corn prices in production regions unchanged, at 1550-1650 yuan per metric ton. CASDE estimates the price of imported corn arriving in southern China at 1650-1750 yuan per metric ton.
CASDE has also had to ratchet its estimate of soybean imports upward over the course of the year. This month CASDE reports that 2016/17 soybean imports totaled 93.5 mmt. A year ago, CASDE had forecast 2016/17 soybean imports at 86 mmt. (USDA's WASDE similarly ratcheted its China soybean import estimate up from 86 mmt a year ago to 93.5 mmt this month, but USDA's 3-mmt forecast of China's corn imports a year ago was very close to the actual number.) CASDE had to also raise its estimate of soybean crush over the course of the year as imports boomed. The final 2016/17 soybean import volume is up 12 percent from the year before.
| China soybean supply and demand (Ministry of Ag, Nov 2017) | |||||
| Item | Unit | 2016/17 Oct | 2016/17 Nov | 2017/18 Oct | 2017/18 Nov |
| Planted area | 1000 ha | 7,208 | 7,208 | 8,194 | 8,194 |
| Harvested area | 1000 ha | 7,202 | 7,202 | 8,194 | 8,194 |
| Yield | Kg/ha | 1796 | 1796 | 1823 | 1817 |
| Production | MMT | 12.94 | 12.94 | 1494 | 1489 |
| Imports | MMT | 92.87 | 93.49 | 94.50 | 95.97 |
| Consumption | MMT | 106.83 | 108.11 | 109.21 | 110.56 |
| --Crushing | MMT | 91.76 | 92.90 | 93.08 | 94.38 |
| --Food | MMT | 11.18 | 11.18 | 12.04 | 12.04 |
| --Seed | MMT | 0.64 | 0.64 | 0.64 | 0.64 |
| Loss and other | MMT | 3.25 | 3.39 | 3.45 | 3.5 |
| Exports | MMT | 0.12 | 0.12 | 0.22 | 0.22 |
| Surplus | MMT | -1.14 | 0.01 | -0.25 | 0.08 |
CASDE raised its estimate of 2017/18 soybean imports to 96 mmt this month, up from 94.5 mmt in October. Although CASDE reported some problems with the domestic crop due to heavy rains in Anhui and Henan Province (where beans are produced mainly for food use), CASDE authors said downward price pressure on soybean markets is evident. CASDE reduced its estimate of domestic soybean prices about 4-5 percent (the only price estimate they cut) to 4175-4375 yuan per metric ton. CASDE estimates the C&F price of imported soybeans at 3050-3250 yuan per metric ton, unchanged from last month. The large gap between domestic and import prices reflects a premium for domestic beans that are presumed to be non-GMO and mainly for food processing use. The fat premium also provides strong incentive to surreptitiously divert imported (GMO) soybeans to food manufacturing use.
CASDE expects imports of vegetable oils to increase in 2017/18 to reach 6.3 mmt, up from 5.8 mmt during 2016/17.
| China edible oils supply and demand (Min Agriculture, Nov 2017) | |||||
| Item | Unit | 2016/17 Oct | 2016/17 Nov | 2017/18 Oct | 2017/18 Nov |
| Production | MMT | 27.28 | 27.36 | 27.53 | 27.76 |
| --Soy oil | MMT | 16.17 | 16.27 | 16.28 | 16.51 |
| --Rapeseed oil | MMT | 5.76 | 5.74 | 5.71 | 5.71 |
| --Peanut oil | MMT | 3.18 | 3.18 | 3.24 | 3.24 |
| Imports | MMT | 5.8 | 5.78 | 6.20 | 6.28 |
| --Palm oil | MMT | 3.2 | 3.34 | 3.75 | 3.75 |
| --Rapeseed oil | MMT | 0.80 | 0.80 | 0.85 | 0.85 |
| --Soy oil | MMT | 0.74 | 0.71 | 0.58 | 0.65 |
| Consumption | MMT | 31.68 | 31.68 | 31.86 | 31.90 |
| --Urban | MMT | 22.92 | 22.97 | 23.12 | 23.4 |
| --Rural | MMT | 8.76 | 8.71 | 8.74 | 8.50 |
| Exports | MMT | 0.17 | 0.17 | 0.13 | 0.17 |
| Surplus | MMT | 1.24 | 1.29 | 1.70 | 1.96 |
CASDE made a slight reduction in 2017/18 cotton output due to heavy rain in central provinces that caused some cotton bolls to rot in the fields. Production was reduced by 30,000 metric tons. Imports are forecast at 1 mmt for 2017/18. CASDE estimates that China's cotton inventory was depleted by over 2.1 mmt during 2016/17 and will drop another 1.9 mmt during 2017/18. CASDE described China's cotton market as "tight" while the world supply is "loose."
| China cotton supply and demand (Ministry of Ag, Nov 2017) | |||||
| Item | Unit | 2016/17 Oct | 2016/17 Nov | 2017/18 Oct | 2017/18 Nov |
| Begin inventory | MMT | 11.11 | 11.11 | 8.94 | 8.94 |
| Planted area | 1000 ha | 3,100 | 3,100 | 3,293 | 3,293 |
| Yield | Kg/ha | 1,555 | 1,555 | 1,602 | 1,616 |
| Production | MMT | 4.82 | 4.82 | 5.35 | 5.32 |
| Imports | MMT | 1.11 | 1.11 | 1.00 | 1.00 |
| Consumption | MMT | 8.09 | 8.09 | 8.22 | 8.22 |
| Exports | MMT | 0.01 | 0.01 | 0.01 | 0.01 |
| End Inventory | MMT | 8.94 | 8.94 | 7.06 | 7.03 |
| China sugar supply and demand (Ministry of Agriculture, Nov. 2017) | |||||
| Item | Unit | 2016/17 Oct | 2016/17 Nov | 2017/18 Oct | 2017/18 Nov |
| Planted area | 1000 ha | 1351 | 1396 | 1472 | 1456 |
| --sugar cane | 1000 ha | 1183 | 1225 | 1277 | 1267 |
| --sugar beets | 1000 ha | 168 | 171 | 195 | 189 |
| Yield | |||||
| --sugar cane | MT/ha | 60 | 61.8 | 60 | 60 |
| --sugar beets | MT/ha | 52.5 | 55.2 | 52.5 | 52.5 |
| Sugar output | MMT | 9.29 | 9.29 | 10.47 | 10.35 |
| --sugar cane | MMT | 8.24 | 8.24 | 9.23 | 9.15 |
| --sugar beets | MMT | 1.05 | 1.05 | 1.24 | 1.2 |
| Imports | MMT | 2.35 | 2.29 | 3.2 | 3.2 |
| Consumption | MMT | 15 | 14.9 | 15 | 15 |
| Exports | MMT | 0.12 | 0.12 | 0.07 | 0.07 |
| Surplus | MMT | -3.48 | -3.44 | -1.4 | -1.52 |
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