14.
02.16
12:07

China's grain stocks at record high

China's grain production is booming - about 50% of the harvest in the State stock

While the Chinese rice production provides largely constant harvest volumes, the increased Chinese grain production within 10 years by over one-thirdwas. After the inventories below deemed necessary by 35% of consumption were dropped in the years 2003 to 2006, the supply situation for China relationships became critical. The State guaranteed minimum prices for corn and wheat introduced, with approximately $350 depending on t far beyond the level of international templates. In the aftermath, the production increased by leaps and bounds. The Government supply warehouses filled increasingly and reach a level of more than 50% of a cereal crop years 2015/16.

Despite the ample inventories grain imports at over 25 million t in the year 2014/15 soared up. The more or less open borders, making it possible to introduce cheaper cereals were the background for these contrasting development. Benefited in particular the coastal and riverside areas. Own corn expensive to piled up in the silos. The State repeatedly pulled the emergency brake in the form of import quotas and gradual reduction of the minimum price guarantees from $300 per t. The compulsory use of own expensive grain brought the pig farms in economic distress, with the result that approximately 20% of the sows was abolished. Reduced livestock caused a smaller feed requirements, so that the cereal stocks continued to rise. Imports fall again below 20 million tonnes by 2015/16.

The Chinese Government further aims to build off the high end stocks by moderate reduction of the minimum price . High pork prices by more €3.30 / kg have again improved the profitability of pig farming, but the increasing requirements on hygiene and manure still slows down a fast recovery of production.

If not crop failures should occur, the high Chinese grain stocks will be even longer time. Export of grain to a significant extent is not taken into consideration for political and financial reasons.

With a total 220 million tonnes of grain reserves China has approximately 40% of the Weltendbestände. Stock pads are these volumes almost exclusively for the Chinese market into account. They should be disregarded as reserves for the needed in the rest of the world, anyway, they cannot be regarded as security of supply. The scaled-back imports of 8 million tonnes to normal by 20 million tonnes take a modest against the background of the storage volume.

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