Just as the agricultural market focused on the major drought in Russia, another major change in the production and consumption of soft commodities is surging in secret: China’s harvest this year is flat, coupled with changes in the country’s eating habits, which are traditionally seen in China. "Food self-sufficiency" constitutes a lot of pressure, pushing up prices and prompting China to import large quantities of food.
The increase in the imports of corn and soybeans in China raises the question of whether China’s food self-sufficiency policy can be maintained as domestic demand rises and urban expansion leads to a reduction in agricultural land use. At present, China’s corn imports have hit a 15-year high, while soybean imports have doubled in five years.
The wholesale price of corn in the Chinese domestic market is currently at the highest level in history. Industry officials predict that China will at least import 1 million tons of corn this year, which is much higher than the 50,000-ton level in 2008-09, and it is the largest import volume since the crops were harvested in 1994-1995.
This year, China’s rice imports are also higher than in previous years. China is making big purchases in Vietnam and other regions, which surprised observers.
China’s overseas purchases of important crops such as corn and rice, which it believes are related to domestic food security, and the surge in soybean imports have rekindled the concern that China’s move may affect the global agricultural commodity market.
“We have already seen how significant China’s demand for soybeans has caused significant changes in the international market. If their demand for corn also rises rapidly...it will obviously cause major changes in the international corn market.†Rabobank Luke, a cereal analyst in London? Luke Chandler said.
Since the beginning of economic reforms 30 years ago, China has faced the warning of doomsday predictions that China's demand growth will lead to a global food shortage. Facts have proved that these predictions are basically defeated.
However, although China has successfully achieved food self-sufficiency, it still has to use limited fertile land, scarce water resources, and relatively backward agricultural technology to support its citizens.
"China's (food) self-sufficiency rate is still as high as 99%, but China is a big country. Generally speaking, the international agricultural market is very inactive, so when they enter the market, especially some new markets, it may have a great impact. "Scott Rozelle, expert in agricultural policy at Stanford University in China, said.
The Chinese government regards grain self-sufficiency as a matter of national security. To cope with the challenges of how to increase food supply, China has repeatedly invested in record-size funds in agriculture.
Deere & Co, the world's largest tractor and combine harvester manufacturer, estimates that the Chinese government has invested 140 billion yuan ($20.5 billion) in agriculture this year, a 9-fold increase from the $14 billion in 2004.
The change in dietary habits of the Chinese people is a key reason for the increase in imports of corn and soybeans in China this year. As the Chinese become more affluent, they become more meatier and eat less than before. According to estimates of the US Department of Agriculture, absolute household demand for rice this year is basically the same as it was 10 years ago, despite the continuous increase in family income.
At the same time, the consumption of major feedstuffs such as corn and soybeans for feeding animals has increased sharply, of which soybean consumption has doubled in 10 years.
Chinese officials disapprove of the surge in food imports. But last week, out of fears about the supply of corn, the Chinese government took extraordinary measures and launched two corn auctions in a week to increase domestic corn supply.
The current market is arguing: Recently, the surge in Chinese food imports (especially corn) indicates that China will purchase food from abroad for a long period of time. Or may it be a one-time incident caused by poor weather in some areas of China? China's grain imports also surged in 1994-95, but it proved to be a short-term temporary phenomenon.
FAO's Senior Food Economist in Rome Abdul Reza? Abdolreza Abbassian stated: "We do expect China's corn imports to gradually increase. However, taking into account China's overall size and consumption, imports should be quite limited, estimated at 5 to 6 million tons, up to 10 million. According to the US Department of Agriculture, China's total corn consumption was 156 million tons last year.
Others believe that China will basically maintain its food self-sufficiency in the future, especially if agricultural policies can successfully increase crop yields.
Fan Shenggen, director of the International Food Policy Research Institute (IFPRI) in Washington and expert on China’s agriculture, believes that “China will not become a large net corn importer†in the next few years.
Fan Shenggen said that agricultural policies, including biotechnology-related policies, will play a key decisive role in the future crop yields and food import demand in China.
The increase in the imports of corn and soybeans in China raises the question of whether China’s food self-sufficiency policy can be maintained as domestic demand rises and urban expansion leads to a reduction in agricultural land use. At present, China’s corn imports have hit a 15-year high, while soybean imports have doubled in five years.
The wholesale price of corn in the Chinese domestic market is currently at the highest level in history. Industry officials predict that China will at least import 1 million tons of corn this year, which is much higher than the 50,000-ton level in 2008-09, and it is the largest import volume since the crops were harvested in 1994-1995.
This year, China’s rice imports are also higher than in previous years. China is making big purchases in Vietnam and other regions, which surprised observers.
China’s overseas purchases of important crops such as corn and rice, which it believes are related to domestic food security, and the surge in soybean imports have rekindled the concern that China’s move may affect the global agricultural commodity market.
“We have already seen how significant China’s demand for soybeans has caused significant changes in the international market. If their demand for corn also rises rapidly...it will obviously cause major changes in the international corn market.†Rabobank Luke, a cereal analyst in London? Luke Chandler said.
Since the beginning of economic reforms 30 years ago, China has faced the warning of doomsday predictions that China's demand growth will lead to a global food shortage. Facts have proved that these predictions are basically defeated.
However, although China has successfully achieved food self-sufficiency, it still has to use limited fertile land, scarce water resources, and relatively backward agricultural technology to support its citizens.
"China's (food) self-sufficiency rate is still as high as 99%, but China is a big country. Generally speaking, the international agricultural market is very inactive, so when they enter the market, especially some new markets, it may have a great impact. "Scott Rozelle, expert in agricultural policy at Stanford University in China, said.
The Chinese government regards grain self-sufficiency as a matter of national security. To cope with the challenges of how to increase food supply, China has repeatedly invested in record-size funds in agriculture.
Deere & Co, the world's largest tractor and combine harvester manufacturer, estimates that the Chinese government has invested 140 billion yuan ($20.5 billion) in agriculture this year, a 9-fold increase from the $14 billion in 2004.
The change in dietary habits of the Chinese people is a key reason for the increase in imports of corn and soybeans in China this year. As the Chinese become more affluent, they become more meatier and eat less than before. According to estimates of the US Department of Agriculture, absolute household demand for rice this year is basically the same as it was 10 years ago, despite the continuous increase in family income.
At the same time, the consumption of major feedstuffs such as corn and soybeans for feeding animals has increased sharply, of which soybean consumption has doubled in 10 years.
Chinese officials disapprove of the surge in food imports. But last week, out of fears about the supply of corn, the Chinese government took extraordinary measures and launched two corn auctions in a week to increase domestic corn supply.
The current market is arguing: Recently, the surge in Chinese food imports (especially corn) indicates that China will purchase food from abroad for a long period of time. Or may it be a one-time incident caused by poor weather in some areas of China? China's grain imports also surged in 1994-95, but it proved to be a short-term temporary phenomenon.
FAO's Senior Food Economist in Rome Abdul Reza? Abdolreza Abbassian stated: "We do expect China's corn imports to gradually increase. However, taking into account China's overall size and consumption, imports should be quite limited, estimated at 5 to 6 million tons, up to 10 million. According to the US Department of Agriculture, China's total corn consumption was 156 million tons last year.
Others believe that China will basically maintain its food self-sufficiency in the future, especially if agricultural policies can successfully increase crop yields.
Fan Shenggen, director of the International Food Policy Research Institute (IFPRI) in Washington and expert on China’s agriculture, believes that “China will not become a large net corn importer†in the next few years.
Fan Shenggen said that agricultural policies, including biotechnology-related policies, will play a key decisive role in the future crop yields and food import demand in China.
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