China's agricultural trade deficit will become the norm

Although China's grain production has achieved "11 consecutive years of growth" since 2004, agricultural trade has correspondingly shown a "dual norm" phenomenon of a normalized trade deficit and normalized price inversion.

This was learned from the 2015 (Third) China Grain and Food Security Strategy Summit.

According to Ye Xingqing, Director of the Rural Department of the Development Research Center of the State Council, who spoke at the summit, with the increase in grain imports, China's agricultural trade has now recorded a deficit for 11 consecutive years, and the scale of the deficit has gradually expanded, so the agricultural trade deficit will become the norm.

⟦NL> Data show that last year China's grain imports exceeded 100 million tons for the first time. In recent years, while the trade deficit in livestock products has expanded rapidly, China's three major grain varieties - rice, wheat and corn - have also recorded net imports for 4 consecutive years, while imports of corn substitutes such as sorghum and DDGS (corn distillers dried grains with solubles) have also increased substantially in recent years.

Experts believe that the agricultural trade deficit is related to the inversion of domestic and international prices. Affected by factors such as the decline in international market prices for bulk agricultural products in recent years and the maintenance of high domestic minimum purchase prices and temporary storage prices, the inversion of domestic and international agricultural product prices has become increasingly obvious. "From the perspective of the natural endowments and development stage of China's agricultural production, the cost of China's agricultural products will remain on an upward trajectory in the future, and in the medium to long term, price inversion will become the norm," Ye Xingqing said.