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Ag reforms to lift China's crop, meat import needs, says USDA

China's long-term import needs of major crops, besides beef, pork and poultry, look higher than had been thought, Washington officials said, warning of a dent to the country ag output prospects from a subsidy shake-up.

US Department of Agriculture, in a much-watched forecast for world agricultural commodity trade, lifted expectations for Chinese imports of rice, wheat and, especially, soybeans as of 2025-26.

The forecast for soybean imports that season was hiked by 8.1m tonnes to 117.6m tonnes, equivalent to two-thirds of estimated global shipments at the time meaning China's stranglehold over trade in the oilseed is expected to strengthen even further from current levels.

In the protein sector, the USDA nudged higher its forecast for China's beef imports as of 2025-16 by 60,000 tonnes to 1.25m tonnes, but more than doubled, to 2.37m tonnes, its estimate for pork buy-ins, ranking the country as by far the biggest buyer.

For poultry imports, the estimate for volumes in nine seasons' time was more than doubled too, to 669,000 tonnes, although this would still keep China behind leaders such as Mexico, Japan and Saudi Arabia in the global league.

'May constrain production'

The upgrades came as the USDA cautioned over a potential dent to Chinese agricultural reforms, including environmental protection laws, and a reform of crop subsidies which, in guaranteeing prices to producers, have promoted the build-up of huge state inventories in the likes of corn and cotton.

USDA forecasts for Chinese crop imports, 2025-26, and (change on forecast a year ago)

Soybeans: 117.6m tonnes, (+8.1m tonnes)

Corn: 5.9m tonnes, (-400,000 tonnes)

Rice: 4.80m tonnes, (+740,000 tonnes)

Wheat: 3.4m tonnes, (+2.0m tonnes)

Cotton: 14.3m bales, (-900,000 bales)

"These strategies may constrain domestic production," the USDA said in its annual long-term agricultural projections report.

While one impact may be to shift area from corn, of which China has particularly large inventories, to the likes of soybeans and spring wheat, the briefing flagged too the prospect of the removal of some land from crop production.

"China has programmes to shift land from grain production to forest and grass and to cut production in areas contaminated with heavy metals and shrinking underground aquifers."

Import needs grow

In livestock too, "environmental regulations", besides high production costs "are constraining production growth", leaving China more reliant on foreign supplies.

"High domestic meat prices have prompted China to rely on imports to satisfy part of its demand for animal protein," the USDA said.

The forecast came despite acknowledgement by the USDA that "China's slowing economy, food safety and animal disease concerns, and high prices have slowed the pace of growth in demand for livestock products".

The USDA also highlighted that, with many of China's farm reforms experimental, "their long-term impact on China's agricultural supply and demand is uncertain".

Quality shortfall

In wheat, the USDA hiked by 2.0m tonnes to 3.4m tonnes its forecast for China's imports in 2025-26, although this remains well below forecasts for the likes of Egypt, seen remaining the top buyer, with shipments expected at 13.1m tonnes at the time.

USDA forecasts for Chinese meat imports, 2025, and (change on forecast a year ago)

Beef: 1.251m tonnes, (+61,000 tonnes)

Pork: 2.37m tonnes, (+1.23m tonnes)

Poultry: 675,000 tonnes, (+344,000 tonnes)

"China has a surplus of wheat, but is short of wheat suitable for use in bakery and specialty products," the USDA noted.

In rice, the forecast China's import needs in nine seasons' time was revised up by 770,000 tonnes to 4.83m tonnes, maintaining the country's position as, by a distance, the top buyer of the grain albeit a figure in line with the 4.70m tonnes the USDA expects for the current season.

Cotton demand boost

However, in cotton, the USDA cut its estimate for China's imports in 2025-26 by 900,000 bales to 14.3m bales, despite a boost to consumption expected from the lower values that the removal of guaranteed prices has allowed.

"By allowing domestic cotton prices to fall, China is expected to recover part of the share of world cotton consumption it lost between 2009 and 2013.

"China's cotton imports are expected to increase throughout the next decade with stronger growth in the second half of the projection period."

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