GIEWS Country Brief: China 16-February-2016

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HIGHLIGHTS - Winter wheat area, for harvest in 2016, unchanged from last year’s record level - Cereal output in 2015 was record level - Aggregate cereal imports in 2015/16 forecast to decrease from last year’s all‑time high - Prices of rice and wheat increase slightly in January

Winter wheat area, for harvest in 2016, unchanged from last year’s record level

Sowing of the 2016 winter wheat crop, which accounts for about 95 percent of the total wheat production, was completed last October under overall favourable weather conditions. Beneficial precipitation since November, coupled with seasonably cool weather aided vegetative development of the crops over large parts of the country, including in main producing areas of Yangtze River Valley and North China Plain. However, some concerns over localized crop damage exist in eastern and southern producing areas, due to unseasonal abundant rains, as well as in the parts of Lower and Middle Yangtze following historically cold temperatures in early February. The China National Grain and Oils Information Centre estimates the area planted to winter wheat for harvest in 2016 at 22.8 million hectares, unchanged from last year’s record level, largely reflecting strong Government incentives for wheat production. Current expectations point to an aggregate wheat output (winter and spring crops) close to the 2015 record level of 130 million tonnes. This forecast assumes favourable weather from late February, when winter wheat is expected to break dormancy and resume growth.

Cereal output in 2015 was record level

The 2015 aggregate cereal production is officially estimated at a record level of 572.9 million tonnes. Most of the increase came from a significant growth in maize output, although production of the other major cereals, wheat and rice, also rose. Maize output is estimated to have risen to a record level of 224.6 million tonnes, 9 million tonnes (or 4 percent) up on the previous year’s level, following larger plantings and increased yields. Similarly, area and yield gains resulted in a 3 percent increase in the 2015 wheat output to 130.2 million tonnes. The 2015 rice harvest also reached a new record level, estimated at 208.2 million tonnes, 0.8 percent above the previous year’s record level.

Cereal imports in 2015/16 marketing year forecast to remain high but lower than in 2014/15

Total cereal imports in the 2015/16 marketing year are currently foreseen to fall by 6 percent to 29 million tonnes compared with the exceptionally high level of last year mostly as a result of record 2015 harvests and large stocks. The bulk of the decrease is attributed to an anticipated reduction in maize and sorghum imports, which are both forecast to fall by around 30 percent, to 4 million tonnes and 7 million tonnes, respectively. By contrast, imports of barley are expected to continue to expand to a record of 8.5 million tonnes. Strong domestic demand for premium quality wheat is seen to double imports of wheat to 3 million tonnes during the 2015/16 marketing year (June/May). Rice imports in calendar year 2016 are anticipated to decrease by 6 percent to 5.8 million tonnes, as a result of Government efforts to limit informal imports.

Prices of rice and wheat increased slightly

Retail prices of Japonica rice and wheat flour increased only slightly in January, mainly reflecting sustained domestic demand, but were still around their year-earlier levels.