China's grain and rice supply: 44% stocks measured by the consumption.
Ensuring the supply of food for a growing population with rising incomes is a high political goal in China. The policies have set a target to 35% stock levels for consumption, rather something about it than under it.
Meanwhile, rice and grain stocks reach approximately 44% of consumption, a dimension that is no longer desirable for Chinese conditions. In the case of wheat, 79 million tons annually consumed 117 million tonnes in stock are according to the data records. The 2015/16 annual harvest is estimated at 130 million tons.
This development was achieved by high guaranteed prices in height from $350 per t, which are far above the market price. The State buying up warehouses filled up. The rising demand for grain in the country made sure but more recently by cheap imports of barley and sorghum. Desperate attempts of the State, from warehouses to consumers (including pig producers) back to sell discounted grain, failed largely because the offered commodity was not competitive.
In the meantime, doubt because according to be whether the stored goods in imposed is recyclable. The partially provisionally established warehouses are little protected against corruption of all kinds. Some inventories should exist only on paper.
The high cereal prices and income guarantees are not only supply policy, but should also help to inhibit the country escape from poorer regions. However, high corn prices mean high feed costs for the distinctive Chinese pork production that contribute to domestic supply is still in considerable proportions. In the year 2014, approximately 12% of the sows were slaughtered due to the inefficiency of the pork production, the Ferkel today are missing for the mast. The fall in meat production has pushed pork prices on values about €3.60 / kg. The missing feed consumption has again increased the feed grain supply.
The political changes provide for a gradual return of guaranteed prices to market levels up to the year 2017. At the same time, the cheap imports of alternative feed should be regulated more strictly. More grain from storage warehouses should be used to the demands to reconstruct the accumulated surpluses on a supply-oriented level.
Considerations to get excess goods on the export route, failed due to the high costs for storage, transport, and especially financing. Also, such actions do not fit into the political image of China.
The high stocks of cereals intended almost exclusively for China's interest. You are not available for international supply needs available. For an accurate assessment of a global supply situation, you should exclude therefore China's reserves. Extrapolating the relevant figures, the worldwide supply only in the light of an average situation appears. In the risky El Niño year could this assessment again (price) meaning gain.
