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  China

Reference Date: 22-December-2016

FOOD SECURITY SNAPSHOT

  1. Winter wheat plantings in 2017 increased slightly compared to last year’s level

  2. Cereal production in 2016 forecast to decrease marginally

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

  4. Prices of rice and wheat stable in recent month

Winter wheat plantings in 2017 increased slightly compared to last year’s level

Planting of the winter wheat crop, for harvest from May 2017, concluded in October. This crop accounts for about 95 percent of the total wheat production. Weather conditions in September and October were favourable in the main producing areas, including the North China Plain and Yangtze Valley, facilitating planting activities. According to official estimates, 22.8 million hectares were sown to winter wheat, slightly above last year’s high level, mainly as a response to the continued strong production incentives from the State’s minimum purchases price programme. However, excessive rains in November raise concerns for the dormant wheat crop in parts of central and southern main growing areas, including the provinces of Jiangsu, Anhui and Henan, which together account for almost half of national wheat output. Nonetheless, prospects remain positive at this stage, as the season has just begun and will very much depend on weather conditions in the coming months.

Cereal production in 2016 forecast to decrease marginally

The 2016 aggregate cereal production is estimated at 560.8 million tonnes, down 2 percent year-on-year. The latest official forecast for the 2016 paddy output, harvested by November, has been revised downwards to 206.9 million tonnes, slightly below last year’s record level. The contraction mirrors reduced yields, following heavy seasonal rains, coupled with storms, as well as low sunshine conditions (for more information please see Rice Market Monitor ). Similarly, excessive rains and consequent pest outbreaks negatively affected the winter wheat crop just before its harvest in localized central areas of the eastern provinces of the country. As a result, official forecasts put the 2016 wheat production at 128.6 million tonnes, 1.6 million tonnes below last year’s level. Regarding the 2016 maize crop production, the Government’s decision to end maize procurement at high minimum support prices this year prompted farmers to shift land from maize to more profitable crops, including soybean, rice and peanuts. As a result, the 2016 maize output is set to decrease by 2 percent or 9.6 million tonnes, to 215 million tonnes.

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

Total cereal imports in the 2016/17 marketing year are currently foreseen to fall by 26 percent to 21.9 million tonnes compared to the exceptionally high level of the previous year, mostly as a result of the good 2015 harvests and large inventories. 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, which are two of the main grains used for feed, are forecast to fall by 43 percent to 4.6 million tonnes and 40 percent to 5 million tonnes, respectively, in the 2016/17 marketing year. Similarly, imports of maize are currently foreseen to decrease by almost 40 percent to 2 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 2016 are forecast at 5.9 million tonnes, 11 percent below 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 month

Retail prices of Japonica rice and wheat flour were stable in recent month, reflecting adequate availabilities from the 2016 good production. Overall, quotations were around their year‑earlier levels.