BEIJING, CHINA – China plays an enormous role in the world grains market, with a large population that is increasing in affluence. Its huge pigmeat sector has been disrupted by African swine fever and then reformed in the aftermath of the disease, pushing feed demand higher.
In its Nov. 18 Grain Market Report, the International Grains Council (IGC) put China’s total grains production at 417.7 million tonnes in 2021-22, compared with 403.2 million in 2020-21.
The IGC puts the wheat crop at 137.1 million tonnes, up from 134.3 million the year before, while corn production is put at 272.8 million tonnes, up from 260.7 million. The IGC puts the 2021-22 barley crop at just 800,000 tonnes, down from 900,000 and puts sorghum output at 3.2 million tonnes, down from 3.3 million. Rice production in 2021-22 is put at 150.4 million tonnes, up from 148.3 million in 2020-21.
The IGC forecasts China’s total grains imports (not including rice) at 49.8 million tonnes in 2021-22, revised up from the previous month’s forecast of 49 million, and down from 60.8 million the year before. Wheat imports in 2021-22 are put at 10.5 million tonnes, down from 10.8 million in 2020-21. Corn imports are now predicted at 16.5 million tonnes, a figure the IGC revised up from its previous month’s estimate of 16 million, but well down on the 29 million imported in 2020-21. Imports of barley in 2021-22 are put at 12.5 million tonnes, revised up from 12.2 million and also up on the previous year’s 12 million.
China’s imports of rice in 2021-22 are now forecast at 3.7 million tonnes, up from 3.4 million forecast a month earlier. The previous year’s imports were 4.2 million tonnes. Exports of rice are forecast at 2.6 million tonnes, up from 2.3 million in 2021.
Among oilseeds, China’s output of soybeans will come to 18.7 million tonnes in 2021-22, down from 19.6 million the year before. The country is forecast to produce 14.5 million tonnes of rapeseed, up from 14.1 million the prior year.
Soybean imports in 2021-22 are forecast at 98.5 million tonnes, revised down from the October forecast of 100.3 million. The previous year’s imports were 95.3 million tonnes. China’s soybean exports are put at an unchanged 100,000 tonnes. Imports of rapeseed in 2021-22 are put at 2.1 million tonnes, down from 2.8 million the year before.
In an annual report on the grains sector published on April 16, 2021, the USDA attaché highlighted the importance the Chinese government puts on self-sufficiency in staple grains.
“On Feb. 21, 2021, the Chinese government released the annual policy guidelines on agriculture and rural development known as the No. 1 Document,” the report said. “There is increased emphasis to shore up grain production of staple food and vegetable crops, maintain targets for arable land utilization, and additional efforts on maintaining and improving the administration of the Minimum Support Price (MSP) program policy for rice and wheat, along with improving the subsidy policy and income stability for corn and soybean producers.”
The attaché forecast for 2021-22 that China “will continue its effort to rebuild its swine herd in 2021 and that overall pork production will remain below the pre-African swine fever (ASF) levels of 2017.”
“Larger, newer swine facilities are increasing production while contending with low sow productivity and high input prices,” the report said. “These factors, along with other diseases in breeding sows and piglets, will constrain significant growth in China’s hog inventory in 2021 and possibly into 2022.”
China’s industrial feed production increased 10.4% year-over-year, to 252.8 million tonnes in 2020, the report said. Pig and poultry feed production accounted for 35.3% and 49.6% of total feed production, respectively, compared with 33.5% and 50.6% a year earlier.
With pig feed production becoming more commercialized, output increased by 16.4% to 89.2 million tonnes, reaching 86% of the record high in 2018. At the same time, layer feed production rose by 7.5%, broiler feed by 8.4%, and ruminant feed by 18.9%.
Regarding corn, the attaché said “MARA’s 2021 guidelines and public statements from high-level officials set a target to increase corn acreage by more than 667,000 hectares in key growing areas. Additional corn acreage will need to come from developing fallow and marginal land or loss to soy plantings.
“MARA’s latest guidelines urge planting grain on all unplanted land as a priority. Any real production gains, however, will be limited by competing policies that encourage soy production and indications that increased planting will occur on poor quality land and in areas not ideal for corn production.”
In an update published on Sept. 30, the attaché explained that the wheat harvest in Henan finished at the end of June before floods in July but added that “the disaster still caused serious damage to stored wheat as well as processing and transportation facilities.”
“There is no official estimate of damage, but flour factories in these areas reported they had to shut down due to the floods and some machines and equipment were damaged,” the attaché said. “Wheat procured by large traders such as Sinograin was reported safe in well-equipped silos. But approximately 30% to 50% of the total 2021-22 wheat harvest was stored by farmers or small traders/stations.”
More than 5,000 flour mills operate in China, including the world’s largest milling company, Wudeli Flour Group. China grain industry experts Fengcheng Wang and Ningbo Li said in a May 2020 World Grain article that “traditionally, around 30% to 35% of wheat flour is used to make noodles and steamed buns, respectively, and bread, cake and cracker account for another 20%.”
In a July 1, 2021, update on oilseeds, the attaché said that “with domestic corn prices currently near a six-year high, and corn subsidies up, farmers are switching from soybeans to corn, particularly in China’s northeastern grain belt. Soybean imports are forecast to reach 102 million tonnes in 2021-22 and an estimated 100 million tonnes in the current marketing year to meet modestly growing soybean meal demand for feed.”
Rice remains a staple of the Chinese diet. The attaché said in an Oct. 15, 2021, report that as international rice prices gained competitiveness over Chinese rice prices, significant import volumes have entered China since November 2020.
“Using current customs data, India is now China’s top rice supplier, with broken rice accounting for 97% of China’s imports from the supplier,” the attaché explained. “As Chinese rice prices lost competitiveness, exports slowed down from momentum seen earlier during the years of 2017, 2018 and 2019.”
Reporting on the biofuels sector on Sept. 13, 2021, FAS Beijing said that “wavering and uncertain policies and prices continue to limit fuel ethanol consumption in China.”
“In late 2020, the State Council called for controlling the expansion of fuel ethanol processing capacity,” the report said. “Only a few months later, in early 2021, the National Energy Administration urged local governments and companies to support the development of biofuels.”
The government has expressed support for biotech breeding to boost food security and industry has been interested in the domestic use of biotech varieties for years, the attaché said in the annual report on grains.
“Recent government pronouncements have led industry to expect progress towards commercialization,” the attaché said. “China has never permitted planting of soybean or corn varieties produced through agricultural biotechnology, but it does permit their import and for use in animal feed with certain restrictions.”