China

GIEWS Country Brief: China 17-February-2021

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FOOD SECURITY SNAPSHOT

  • Area planted with 2021 winter wheat estimated close to average level

  • Near-average cereal production obtained in 2020

  • Cereal imports in 2020/21 likely to reach an all-time high

  • Domestic maize prices increased sharply in 2020 on strong feed demand

Area planted with 2021 winter wheat estimated close to average level

Planting of the 2021 main winter wheat, which accounts for more than 90 percent of the annual wheat production, was completed in October and the harvest is expected to start in May. The area planted is estimated at 22.8 million tonnes, close to the previous year’s average level. Precipitation amounts between September and November 2020 have been average to above average over the main producing areas in the North China Plain and in the eastern and central parts of the country, replenishing soil moisture and creating conductive conditions for planting activities and germinating crops. In the northern parts of the country, the wheat crop entered dormancy in December, while in the eastern and central parts the wheat crop is currently at tillering to jointing stages of development. According to field assessment reports, as of early January 2021, wheat crop conditions and soil moisture were near average throughout the country. The minor 2021 spring wheat crop will be planted from March onwards.

Near-average cereal production obtained in 2020

The 2020 cropping season was concluded in November and the aggregate cereal production is estimated at 616 million tonnes, close to the five-year average.

Movement restrictions and negative economic effects associated with the COVID-19 pandemic apparently did not cause major disruptions to agricultural activities in general. Flood damages to standing rice and wheat crops in June and July were reported in southern crop producing areas. Heavy rains and strong wind, due to typhoons in late August and early September, caused localized damages to the ready-to-be harvested maize crops in the main producing areas located in northeastern parts of the country.

Cereal imports in 2020/21 likely to reach record level

Total cereal imports in the 2020/21 marketing year are likely to increase to an unpreceded high level of almost 45 million tonnes, exceeding the five-year average by 80 percent. The largest increase is foreseen in imports of maize for feed, mostly driven by the recovery in domestic pork production following the African Swine Fever (ASF)1 in 2018 and 2019 as well as the strong growth in the poultry, dairy and starch sectors. The strong demand has caused a surge in domestic maize prices, encouraging a strong pace of import orders for cheaper maize imports, as well as cheaper priced feed-quality wheat, barley and sorghum.

Imports of maize are forecast at a record 20 million tonnes in the 2020/21 marketing year (October/September), almost five times the average level. Similarly, imports of other feed crops, namely barley and sorghum, are forecast at the high level of 7.5 and 6 million tonnes, respectively. Imports of wheat are also projected to rise at about 7.5 million tonnes, the highest level since 2004/05. By contrast, imports of rice in the 2021 calendar year are forecast to decline by 10 percent year on year to 2.8 million tonnes on account of ample domestic availabilities.

Domestic maize prices increased sharply in 2020 on strong feed demand

Domestic prices of Indica and Japonica rice were generally stable throughout 2020 in most parts of the country, amid adequate availabilities. However, in some flood-affected southern provinces, prices of rice increased since June 2020.

Prices of maize increased sharply throughout 2020 and, in January 2021, were 50 percent above their year-earlier levels. The persistent upward trend is attributed to strong demand from the feed sector following the recovery in the pig production level after the steep ASF-led contraction registered in the previous two years.

Domestic prices of wheat were generally stable at the beginning of 2020, with some declines in May/June due to the arrival into the markets of the main season harvest. During the second half of 2020, prices of wheat generally increased, supported by the growing demand for food consumption and from the feed industry, as wheat is used as a substitute for maize.