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Country Briefs

  China

Reference Date: 11-April-2017

FOOD SECURITY SNAPSHOT

  1. Overall 2017 winter wheat crop conditions mostly favourable

  2. Maize area and production expected to decline in 2017

  3. Cereal production in 2016 decreased marginally

  4. Cereal imports in 2016/17 forecast to sharply decline from previous year in response to policy changes

  5. Prices of rice and wheat stable in recent months

Winter wheat conditions in 2017 mostly favourable with exception of southwest region

Planting of the winter wheat crop was completed in October 2016 and the harvest is expected to start from May 2017. This crop accounts for about 95 percent of the total wheat production. Winter wheat is currently at re-greening to jointing stage in the major producing regions. Crop conditions are favourable in major producing areas of Northern China due to proper agro-climatic conditions, while excessive rains and low radiation have negatively affected crops in Southwest China.

Aggregate cereal production in 2017 is tentatively set at 563.5 million tonnes, slightly below last-year level. Maize production is expected to decline as a consequence of the policy reform of supply structure in 2017.

Under the new supply structural reform, the Government’s support to rice and wheat production will continue in 2017. On 18 February, the Government announced the minimum purchase prices for rice in 2017 as follows: for early Indica rice at CNY 2 600 (USD 378), medium and late Indica at CNY 2 720 (USD 396) and Japonica rice at CNY 3 000 (USD 437). The minimum purchase price for winter wheat was set at CHY 2 360 (USD 344), announced on 21 October 2016.

Cereal production in 2016 estimated to decrease marginally

The 2016 aggregate cereal production is estimated at about 566 million tonnes, down 2 percent compared to 2015. The latest official estimate for the 2016 paddy output, harvested by last November, points at 206.9 million tonnes, slightly below the previous year’s record level. The small contraction mirrors reduced yields, following unfavourable weather conditions during the growing season. Similarly, the 2016 wheat production is estimated at 128.6 million tonnes, 1.6 million tonnes below the previous year’s level. Despite the impact on production by the Government’s decision to end maize procurement at high minimum support prices, the 2016 maize output is set at 219.6 million tonnes, some 5 million tonnes below the previous year’s record, but still higher than the five-year average.

Cereal imports in 2016/17 forecast sharply down from 2015/16 record level

Total cereal imports in the 2016/17 marketing year (July/June) are currently foreseen to fall by 32 percent to 21.3 million tonnes compared to the exceptionally high level of the previous year. The bulk of the decline is on account of falling purchases of barley and sorghum from the international market due to expectations of the much larger use of domestic maize for feed in view of the Government’s plan to cut its inventories. Consequently, imports of barley and sorghum, the main grains used for feed, are forecast to fall by 43 percent to 4.6 million tonnes and 46 percent to 4.5 million tonnes, respectively, in the 2016/17 marketing year. Similarly, imports of maize are currently foreseen to decrease by almost 68 percent to 1 million tonnes. Strong domestic demand for premium quality wheat is seen to keep wheat imports high at 3.7 million tonnes during the 2016/17 marketing year (June/May). Rice imports in calendar year 2017 are forecast at over 6 million tonnes, similar to last year’s high level, as a result of the Government’s efforts to limit informal inflows of rice across borders.

Prices of rice and wheat stable in recent months

Retail prices of Japonica rice and wheat flour, major food crops, were generally stable with a slight increase only in recent months, reflecting adequate availabilities and seasonality. Overall, quotations were about 5 percent above their year‑earlier levels. Wholesale prices of maize, the major feed crop, were lower (6.7 percent) compared with the same period of the previous year as a result of the change of the Government’s maize production policy. The data shows that the price of pork in March was about 7 percent lower and the price of cabbage was about 46 percent lower compared to a year earlier. These will be beneficial to the food consumption of the poor and low income families.