4.4 Major Crops Trade Prospects

Grain import and export in China in the first half of 2016

Maize

During the first half of 2016, China has imported 2.9 million tons of maize, an increase of 9.6% over the same period in 2015. Ukraine (91.1%), the United States (6.6%) and Russia (2.2%) were the main sources for the maize imports, the value of which reached US$560 million--11.9% below the value for the first semester in 2015. Maize exports over this year’s first half (1,320.75 tons) decreased by 80.8% and went primarily to the Democratic People’s Republic of Korea (75.7%), Russia (22.8%), and the Republic of Korea (ROK, 1.5%). The export earned US$ 471,300, down 75.0%.

Rice

In the first half of 2016, the total import of rice in China was 2.006 million tons, an increase of 40.4% compared to the previous year. The imported rice mainly stems from Vietnam, Thailand, and Pakistan, respectively accounting for 42.7%, 27.0%, and 25.1% of imports. The expenditure for rice import was US$909 million, reflecting a year-on-year growth of 36.9%. Total rice export over the period was 127,100 tons, up by 8.9%, mainly exported to the ROK, Japan, and Hong Kong (48.1%, 19.5%, and 6.9%, respectively). The value of the export was US$129 million, an increase of 14.5% over 2015.

Wheat

During the first semester of 2016, Chinese wheat imports reached 1.79 million tons, an increase of 26.6% over 2015. The main sources include Australia (45.3%), Canada (27.5%), the United States (14.2%), and neighboring Kazakhstan (12.5%). Notwithstanding the increase in volume, the total expenditure of US$431 million was a decrease of 4.7% compared with 2015. Wheat exports over the same period rose 9.4% to reach 55,800 tons. Hong Kong (2.4%), Ethiopia (18.9%), and Macao (5%) were the main destinations of Chinese wheat exports.

Soybean

The total import of soybean was up by 9.7% to 38,562,300 tons in China during the first half of 2016. Brazil, the United States, and Argentina respectively contributed 54.1%, 40.9%, and 2.3%, for a total value of US$14.836 billion, down 6.5% compared to the first six months of 2015. Soybean exports of 70,800 tons (-16.7%) earned US$62.205 million (-24.9%).

Import prospects for major grains in China in 2016

Based on the latest monitoring results, China grain imports are projected to increase. The projections below (see also figure 4.x) are based on remote sensing data and the Major Agricultural Shocks and Policy Simulation Model, which derived from the standard GTAP (Global Trade Analysis Project).

Maize

According to the projections, national maize imports will go up 3.8%, while exports will decrease by 21.5% in 2016. In July, a drop in international maize price enlarged the gap between domestic and international prices, which will result in an increase of imports. However, because little difference exists between domestic supply and demand, the volume of imports is unlikely to exceed the quota of 7.2 million tons. Significant volumes of maize alternatives will also be imported.

Rice

China’s 2016 rice imports are expected to increase by 36.1% compared to 2015, while exports will go up 5.7%. As the recent Cost, Insurance and Freight (CIF) price for rice was consistently lower than domestic prices, a substantial increase of imports occurred in the first half of 2016. With the gradual decrease of the difference between international and domestic prices, imports will decrease as well in the second half of this year. 2016 rice imports are expected to increase later in the year, but will be within the limits imposed by prevailing quotas.

Figure 4.x Rate of change of imports and exports for rice, wheat, maize, and soybean in China in 2016 compared to those for 2015 (%)

Source: Authors based on CropWatch remote sensing data and results from the Major Agricultural Shocks and Policy Simulation Model.

Wheat

China’s wheat imports will increase by 15.6 percent, but exports are projected to drop 7.2% compared with those of 2015. The rate of increase for wheat imports, however, is expected to slow down in the second half of the year because: (i) the rate of decline for the international wheat price was larger than for domestic prices since the second half of this year, and (ii) the price gap of quality wheat between domestic and abroad also narrowed in July.

Soybeans

Soybean imports will increase by 6.4% while exports will be reduced by 17.5% in 2016, according to the projections. Because the gap between domestic and international prices narrowed since July and because the share of sorghum among Chinese crops changed in China recently, the imported amount of soybean will be only slightly greater than that for the previous year.