Ministry of Agriculture forecasts China's grain output to grow 0.6% annually

Rice

Can achieve self-sufficiency; imports basically remain stable

The report notes that rice is currently China's second-largest grain crop. After China's rice output surpassed 200 million tons in 2011, it reached a record high of 206.43 million tons in 2014; domestic rice market prices were stable with slight increases; China's rice trade was generally a net import.

The report forecasts that in the next 10 years, China's total rice output will remain stable, holding above 200 million tons. Specifically, the rice planting area will maintain a trend of stable with slight decrease, while per-unit yield will continue to increase. In 2020, the rice planting area will decrease to 446 million mu (29.75 million hectares), per-unit yield will increase to 461 kg/mu (6912 kg/hectare), and total output will reach 205.6 million tons. In 2024, the rice planting area will decrease to 443 million mu (29.55 million hectares), per-unit yield will increase to 464 kg/mu (6955 kg/hectare), and total output will reach 206.5 million tons. In the next 10 years, China's total rice consumption will continue to grow. During the outlook period, food consumption will continue to grow, processing consumption will increase slightly, seed consumption and losses will decrease slightly, and total consumption will increase. It is expected that in 2024 the total domestic consumption of rice will be 144.76 million tons. In the next 10 years, the overall prices of China's rice and milled rice will maintain a stable trend with slight increases.

The report holds that because China has limited rice trading partners, the possibility of a large increase in imports is not great. It is expected that in 2024 China's rice imports will be about 3.2 million tons, an increase of more than 600,000 tons over 2014; although imports will increase, the margin will not be large.

The report also mentions some uncertain factors affecting rice production and the market. First, natural condition factors such as water resources, arable land, and climate change. China's water resources are unevenly distributed in time and space and short in total volume; combined with a weak foundation of farmland water conservancy facilities, this also makes it difficult to control droughts and floods caused by extreme weather. During the outlook period, as a new round of agricultural structural adjustment unfolds and advances in depth, in the Sanjiang Plain region of Northeast China where groundwater extraction is relatively heavy and in areas of severe heavy metal pollution in the south, the rice planting area is expected to be reasonably controlled. Second, policy factors such as agricultural product prices and macroeconomic regulation. The rice price support policy may be further reformed; the coordinated integration and concentrated use of agriculture-related funds has become the direction of rural reform, and both the rice production support policy and the price support policy may be reformed. Monetary policy regulation will become more refined, and the rice processing sector will undergo a round of optimization and integration, which will have a certain impact on rice market prices. Third, trade factors such as rice-exporting countries' policies and exchange rates. Traditional rice-exporting countries represented by Thailand are actively reducing inventories, and Vietnam, as a late-rising exporter, is considering a purchase and storage policy, which will also affect the world rice market. At present, the United States has launched a monetary quantitative easing policy, and the RMB exchange rate has also fallen continuously, which will cause the nominal prices of grain priced in US dollars to be relatively lower. In addition, there are other factors such as the upgrading of consumption structure.

⟦NL> Wheat

Production actively optimized; production and demand basically balanced

The report forecasts that in the next 10 years, China's wheat production will be constrained by agricultural resource and environmental factors such as soil and water, and production regions will be adjusted somewhat.

The report estimates that in the next 10 years China's wheat planting area will be actively reduced, and is expected to be 352 million mu (23.48 million hectares) in 2024, but per-unit yield will further increase, expected to reach 367 kg/mu (5506 kg/hectare) in 2024, an increase of 18 kg/mu (262 kg/hectare) over 2014. Wheat output will continue to grow, expected to reach 129.31 million tons in 2024, an increase of 2.5% over 2014.

In terms of consumption, the report forecasts a trend of steady growth in the next 10 years. It is expected that in 2024 total wheat consumption will increase to 131.95 million tons, with an average annual growth of 0.6%. Among this, driven by continued population growth, wheat food consumption will still maintain a growth trend, expected to reach 88.77 million tons in 2024, with an average annual increase of about 0.5%, and its share in total wheat consumption will remain at about 67%; as the agricultural product price formation mechanism is further improved, the growth in wheat feed consumption will decline, and it is expected that in 2024 wheat feed consumption will be about 18.33 million tons, accounting for close to 14% of total wheat consumption; as the food industry continues to develop, wheat processing consumption will continue to increase, expected to reach 15.39 million tons by 2024, with an average annual growth of about 1.3%, accounting for about 11.7% of total wheat consumption; with advances in sowing and cultivation techniques, future wheat seed consumption will decrease slightly, expected to decline slightly from 4.59 million tons in 2014 to 4.48 million tons in 2024, with an average annual decrease of 0.2%; with improvements in drying and storage facilities, the wheat loss rate will decline, expected to be about 4.98 million tons in 2024, down 1.4% from 2014.

In terms of trade, the report forecasts that wheat imports will basically remain stable in the next 10 years. In the short term, the world economic recovery is weak, the US economy is performing relatively strongly, international commodity prices denominated in US dollars are under continuous pressure, while domestic prices will remain generally stable, and international wheat prices will maintain a certain competitive advantage. It is expected that in 2024 China's wheat imports will reach about 2.8 million tons, an increase of 1.8 million tons over 2014. Because Chinese wheat lacks international competitiveness and its export advantage is not obvious, during the outlook period annual wheat exports will be about 200,000 tons, and in the future China's wheat trade will still maintain a net import pattern.