Free Submission Public Relations &
Deutsch English


New Market Study Published: China Agribusiness Report Q1 2014

Print article Print article
2013-12-08 17:38:51 - New Food market report from Business Monitor International: "China Agribusiness Report Q1 2014"

China's weight in the global agricultural sector is growing, as the country has an increasing impact on international production balances and prices. China will maintain a strong appetite for key commodities, and we highlight in particular the growth potential for sugar, dairy and meat products. High demand growth, strong government support and potential for investment and consolidation in these industries will help them outperform in the coming years. However, the agribusiness sector is going through challenging times, with GDP slowing, consumer trust in food safety dwindling, food ingredient prices rising, labour costs soaring and bank loan requirements for small-sized enterprises tightening. This is best seen in the probe led by the government into foreign dairy companies' price fixing schemes, which

led to a record fine for top producers.

Key Forecasts

* Corn production growth to 2016/17: 22.1% to 235.4mn tonnes. Output expansion will be driven by steady improvements in corn yields, the probable adoption of GM corn in the coming years and sustained public support.
* Pork consumption growth to 2017: 22.8% to 64.5mn tonnes. Pork will remain the meat of choice for Chinese consumers and consumption will be driven by revenue growth. Demand is likely to remain resilient despite the slowdown in the economy.
* Sugar production growth to 2016/17: 19.2% to 14.7mn tonnes. Production will be supported by improving yields and soaring domestic demand.
* BMI universe agribusiness market value: US$543.5mn in 2014 (up 1.9% compared with 2013, growth forecast to average 3.0% annually between 2013 and 2017).
* 2014 real GDP growth: 6.7% (down from 7.6% in 2013, forecast to average 6.4% between 2013 and 2017).
* 2014 consumer price inflation: 2.9% y-o-y ave (up from 2.8% in 2013, forecast to average 2.8% between 2013 and 2017).
* 2014 central bank policy rate: 5.75% ave (down from 6.00% in 2013, forecast to average 5.80% between 2013 and 2017).

Full Report Details at
- ..

Key Revisions To Forecasts

* Rice production forecast for 2013/14 revised down, to 141.9mn tonnes (compared with a previous forecast at 143.3mn tonnes). This revision is due to unfavourable weather in various growing regions, including Hunan and southwest regions of the country.
* Cotton production forecast for 2013/14 revised up, to 32.8mn 480kg bales (compared with a previous forecast at 32.0mn bales). This revision is due to higher-than-expected production in the Xinjiang region.
* Corn production forecast for 2013/14 revised down, to 210.5mn tonnes (compared with a previous forecast at 212.3mn tonnes). The crop has been hit by drought in the southern provinces and severe flooding in key producing provinces such as Heilongjiang, Jilin and Liaoning.

Key Developments

China is preparing the ground to scrap its controversial cotton and sugar stockpiling programmes, which aimed at supporting farmers and production but ended up distorting domestic and international prices. The government is now considering switching from the stockpile policy and the flour prices to direct subsidies and loans to farmers. This is likely to lead to a decrease in cotton and sugar imports once the reform is implemented, as domestic prices will ease, helping mills to return to local supply. In the past two years, cotton and sugar imports skyrocketed due to China's farms policies.

China is increasingly looking to crack down on alleged corrupt sales practices by foreign milk powder manufacturers while heavily subsidising the largest domestic players in order to push consumers towards local brands. China is multiplying its efforts to favour local dairy producers and foster consolidation in the industry. The government announced in September 2013 it will give CNY30bn (US$4.9bn) to the largest domestic milk companies in order to incentivise milk production growth and consolidation. This, coupled with recent probes into milk powder pricing by foreign brands, is a sign that the low-hanging fruits of the promising milk powder segment have already been reaped. However, China will be unable to solve dairy industry problems related to the lack of milk supply and quality in the short term, and foreign companies still have many bright days ahead.

China is slowly opening the door to beef imports. We believe Australia will maintain its grip on the growing Chinese beef import market in spite of growing competition from emerging markets, such as Uruguay, Brazil and India, that offer cheaper cuts in greater quantities. Overall, exports to China are likely to remain volatile as the country is liable to impose swift trade restrictions if there is a disease outbreak or any doubt about the meat quality.

China is on track to reach record high corn and wheat imports in 2013/14, as the domestic production deficit widens this season despite output growth. Imports of wheat are estimated at 8.5mn to 9.4mn tonnes this season, according to the USDA and the FAO respectively, compared with 3.0mn to 4.9mn tonnes in 2012/13, following those sources. For corn, imports will also be historically elevated, at 7.0mn to 10.6mn tonnes in 2013/14, according to the USDA and the FAO, compared with 2.7mn to 7.8mn tonnes in 2012/13. Since late 2012, two bumper harvests have made corn prices more competitive compared with wheat for feed use. As a result, feed mills are more consistently using corn as a primary energy ingredient

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at or call us at 1.800.844.8156.

Bill Thompson
Phone: 18008448156

Disclaimer: If you have any questions regarding information in these press releases please contact the company added in the press release. Please do not contact pr-inside. We will not be able to assist you. PR-inside disclaims contents contained in this release.
Latest News
Read the Latest News


Terms & Conditions | Privacy | About us | Contact