GIEWS Country Briefs: China 12-June-2019

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  • Production prospects for 2019 cereal crops favourable

  • Concerns about Fall Armyworm infestations progressing towards main maize producing areas

  • Cereal import requirements in 2018/19 forecast to decrease to below average level

  • Prices of rice remained stable since beginning of 2019, while prices of wheat decreasing

  • Concerns about outbreaks of African Swine Fever

Production prospects for 2019 cereal crops favourable

Harvesting of the main winter wheat crop is ongoing and will be completed at the end of June, while harvesting of the spring wheat crop will take place in July and August. Production prospects of both winter and spring wheat crops are favourable. According to remote sensing data, overall vegetation conditions are at normal and above normal levels throughout the main producing provinces (see ASI map). Sufficient snowfall protected the winter crops from low temperatures in most of the country during December and January. Subsequently, well-distributed and normal rainfall between February and May 2019 eased moisture deficits in localized parts of the North China Plain, where the bulk of wheat is produced, supporting crop development and planting activities of the spring crop. Overall, the area planted with wheat in 2019 is estimated at 24.3 million hectares, close to 2018’s near‑average level, supported by attractive margins earned by wheat producers. The 2019 wheat production is preliminarily forecast at 132 million tonnes, close to last year’s near average output.

Harvesting of the 2019 early double rice crop started recently, while planting of single and late double crops, to be harvested between September and November, is still underway. Overall, the planted area with paddy crops in 2019 is expected to be slightly below the average, as farmers might switch to more profitable crops, including soybeans. However, production prospects remain favourable as normal to above normal rainfall has supported planting activities and early crop development in the main producing areas.

Planting of the 2019 maize crop was completed in April in the South and will continue until June in the North, where the bulk of the production is concentrated. The planted area is expected to be near the five-year average, mainly driven by remunerative margins. In the case of the northern Heilongjiang Province, the Government is expected to deliver subsidies to maize growers, encouraging farmers to extend their planting intentions. Overall, production prospects are favourable but some concerns remain for the final maize output due to Fall Armyworm (FAW) infestations spreading northwards from the Yunnan Province, where the pest was first detected in January 2019. As of 29 May, FAW had already spread through 15 southern provinces.

Cereal import requirements in 2018/19 forecast to decrease to below average level

Total cereal import requirements in the 2018/19 marketing year are forecast to decline to 18.3 million tonnes, about 30 percent below the five-year average, reaching the lowest level in six years.

Import requirements of rice in 2019 calendar year are forecast at 4.5 million tonnes, about 22 percent below the previous year’s near average level, on account of ample availabilities from the bumper 2018 paddy harvest and large carryover stocks. Similarly, import requirements of wheat in the 2018/19 marketing year (July/June) are forecast at 3.0 million tonnes, 23 percent below the near average level in the previous year, due to ample domestic availabilities from large inventories. Among imports of coarse grains in the 2018/19 marketing year (October/September), imports of maize are forecast at 4 million tonnes, 16 percent above the near average level in the previous year, reflecting strong demand from the feed industry. By contrast, import requirements of barley in 2018/19 are forecast at 6 million tonnes, 30 percent below the five-year average, while imports of sorghum are forecast to come almost to a halt at 500 000 tonnes, accounting for as little as 12 percent of the previous year’s near average level. The expected sharp decline of barley and sorghum imports reflects their substitution by maize for feed use.

Prices of rice remained stable since beginning of 2019, while prices of wheat decreasing

Prices of “Indica” and “Japonica” rice varieties were generally stable from January to April 2019 due to ample market supplies and, in May 2019, decreased slightly, ahead of the onset of the early rice harvest.

Prices of wheat and wheat flour have been under pressure since November 2018, mainly due to large supplies and favourable expectations of the 2019 wheat harvest.

Concerns about outbreaks of African Swine Fever

The country, which is the largest producer and consumer of pork in the world, faces a possible large shortage of supply of its main meat staple. Extensive outbreaks of African Swine Fever (ASF), a highly contagious and lethal disease affecting pigs and wild boars, raise concerns on the food security and livelihoods of the most vulnerable rural households and small farmers.

According to the Ministry of Agriculture and Rural Affairs (MARA), 138 outbreaks of ASF have been detected across the whole country since August 2018. In an effort to contain the further spread of the disease, as of 6 June 2019, MARA has reported that about 1.13 million pigs were culled. Additionally, several actions to improve the biosecurity conditions of the pork industry were rolled out, including restrictions of transporting pigs between provinces and stopping the activities of slaughter houses if ASF is detected. As a result, pork meat production has declined since the beginning of the year. However, the release of frozen stocks since mid-March has filled the supply gap and kept prices of pork meat stable.

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