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Supply and demand of China’s main agricultural products 2017qrcode

Feb. 8, 2017

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Feb. 8, 2017
By CCM - The supply and demand of the major agricultural products in China for 2017 is mostly balanced, but also has some oversupply situations for certain commodities, which will have a severe effect on the price development. 

First have a look at the supply situation of the major products that are expected for 2017. 
 
Supply
 
The harvest of hybrid rice in China is facing a less severe situation than expected, even endured several natural disasters, and compared to last year. In the whole year 2016, a total amount of 280 million kg has been harvested from an area of 108.67 ha. This represents an increase of 12.41% in the planting area and 17.15% of seeds output. According to CCM, the occurrence of natural disasters could not harm the yield severe, which made the situation better than it was the case in 2015. Some of the main disasters were typhoons and heat, occurring in Jiangsu, Hunan, and Jiangxi provinces. This caused a yield reduction of about 22 million kg.
 
The planting area of conventional rice was hit by natural disasters as well, namely typhoon, flood, and heat. This caused a harvest reduction of about 40 million kg and a total output of 894 million kg.
 
The output of cotton seed reached 74.62 million kg in 2016, which is a reduction of about 700 thousand kg compared to the previous year. Hybrid cotton in China stated a yield of 1.09 million kg, which is still far behind the output of conventional cotton, which showed a yield of 75.53 million kg.
 
China, one of the largest producers of soybeans, achieved an output of 444 million kg of its seeds in 2016. That was even an increase of about 72 million kg, compared to last year. Even the devastating drought in Heilongjiang Province could not stop the increase.
 
The yield of potatoes in China showed an increase of 1.5 billion kg in 2016. That resulted in the total output of 8.5 billion kg. Some natural disasters like heat and drought reduced the yield to some extent but didn’t stop the massive growth in general.
 
The output of winter oilseed rape in China is still decreasing with a projected yield of 12.9 million kg in 2016. According to CCM, if the planting area for winter oilseed rape and also the consumption of seed show a stable trend, the balance between demand and supply of the seeds will be even.
 
Demand
 
The demand of hybrid rice in China will be about 240 to 250 million kg in 2017. This amount is not even close to the supply during this year, which will be around 360 million kg, based on 80 million kg of inventory and newly harvested rice seeds of 280 million kg during 2016. Therefore, the supply is exceeding the demand in large scales. According to CCM, some price fluctuations in hybrid rice seeds are very unlikely, however, due to the amount of conventional early rice seeds, which can be used as a substitute for hybrid rice seeds.
 
The total demand of conventional rice in China in 2017 will be around 700 million kg, which can be satisfied by the supply, that is going to be increased throughout the year.
 
The demand of soybean seeds is very likely to be around 700 million kg in 2017, which will be met by enough supply from the 6.4 million ha of planting area.
 
According to CCM, the total demand for cotton seeds in China will be around 82.20 million kg in 2017. This demand will be satisfied by a slightly higher supply of 94.62 million kg. The planting area is also expected to decrease to a certain extent, resulting of the slight oversupply of cotton seeds.
 
The planting area of potatoes will remain stable in China in 2017, leading to a balanced demand and supply situation of this commodity for this year.
 
Finally, the demand for winter wheat is very likely to be met in 2017, looking at the planting area of 8.21 million ha with an expected seed yield of 5.3 billion kg. This development is crucial to maintaining the market stability nationwide.
 
Source: CCM

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