China's self-sufficiency is declining
China's latest import purchases on the wheat market are increasingly bringing a development that has been taking place for years back into the public eye. Since the 1990s, China's wheat supply had increasingly improved to the 100% mark (see thick dashed line) and stabilized there more or less safely. However, the last 5 years since 2008 have shown a clear downward trend, which is obviously becoming more pronounced this year. China is said to have contracted a total of 4.2 million tons of grain last month, including large quantities of wheat.
The reason for this year's import activities is due to a wheat campaign that was severely damaged by sprouting, mold and rust fungus as a result of high rainfall and humidity. The full extent of the damage (4 to 10 million tons?) will not be answered satisfactorily for the time being, but the significantly increased import activities indicate the direction and approximate order of magnitude.
China's feed grain market - consisting largely of maize - was still characterized by slight surpluses in the past. Some maize was exported. This development is also a thing of the past China's maize imports have now reached the level of 7 million tons per year. The government's efforts to promote maize cultivation over soybean cultivation have not been able to bring about any fundamental change.
The rapid reduction in self-sufficiency with the oilseeds soya and rapeseed is striking. A self-sufficiency level of 56% is expected in 2013. China has to import increasing quantities of soy (around 60 million tons per year). This corresponds to around 60% of the total world trade in soybeans. Rapeseed and palm oil are also imported. However, the level of self-sufficiency has also fallen to 70 %.
Years of development suggest that China is increasingly reliant on further increases in imports, as the rising population with increasing incomes of the growing middle and upper classes demands more and more highly processed food, which China can no longer produce itself on its own limited land area with increasingly scarce water availability.
The forecast is for 15 to 20 million tons of grain imports by 2015 to 2020, and it is quite possible that this figure could already be reached in 2013.
