China Agribusiness Report

Providing expert analysis, independent forecasts and competitive intelligence on the agribusiness industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, Supply & Demand Forecasts, Commodity Price Analysis and Company Profiles.

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China Agribusiness Report
Product Price
$1,295.00

BMI View: 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 its appetite for key commodities for the foreseeable future , with particular potential for production growth in sugar, dairy and livestock . High demand growth, strong government support and the potential for investment and consolidation in these industries will help them outperform in the coming years. However, the agribusiness sector is experiencing challenging times, seen in the slowdown in meat and milk powder consumption in 2015 .

Renewed Growth Ahead
China - Agribusiness Market Value
BMI Calculation/FAO

Key Forecasts

  • Soybean production growth to 2019/20: 0.9% to 12.3mn tonnes. In spite of the increase in production in 2016/17, soybean production will remain low in China as the crop lack attractiveness for farmers.

  • Pork production growth to 2019/20: 13.0% to 62.1mn tonnes. Increased production continues to be encouraged on the back of elevated local livestock prices. The increased availability of vaccinations and the ongoing commercialisation of the industry are also likely to boost output.

  • Sugar consumption growth to 2020: 16.7% to 19.6mn tonnes. Consumption will be boosted by rising income, which will support demand for products in key industries, such as the confectionery, dairy, beverage, and food processing

  • BMI universe agribusiness market value: USD1,327mn in 2016 (up 2.9% compared with 2015, growth forecast to average 4.3% annually between 2016 and 2020).

  • 2016 real GDP growth: 6.3% (down from 6.9% in 2015, forecast to average 5.8% between 2016 and 2020).

  • 2016 consumer price inflation: 1.8% y-o-y ave rage (up from 1.5% in 2015, forecast to average 2.3% between 2016 and 2020).

  • 2016 Central Bank policy rate: 4.10% eop (down from 4.35% eop in 2015; forecast to average 4.10% eop between 2016 and 2020.

Key Developments

Under its new 13th Five-Year Plan, which was finalised and approved at the annual National People's Congress in March 2016, China will carry on reforming its agricultural sector. With these reforms, China aims to address mounting challenges and deficiencies in its agricultural sector - which include grains overproduction, elevated prices far above international levels, excessive government stockpiling and environmental degradation. Authorities are now aiming to boost yields to offset the stagnation in arable land, but without sacrificing the environment. Moreover, China plans to diversify production towards commodities in increasing demand (including meat and milk), while accepting imports of a larger volume of staples when needed.

In order to achieve these goals, the government will foster on changes in farm structure, the partial liberalisation of agricultural prices and rebalancing the mix of commodities. It will also intensify its mechanisation efforts and focus on innovation to boost the country's own seed technology in order to eventually commercialise genetically modified corn seeds. Although the government has mentioned plans to commercialise GM soybean in the next five years in the Five-year plan for science and technology to 2020, published in August 2016, the process will be lengthy, and China will most likely allow domestic GM corn first.

China has started publishing a monthly China Agricultural Supply and Demand Estimates (CASDE), on the model of the USDA's WASDE. The government has been trying to improve statistical transparency and accuracy over recent months. Although the USDA's data will remain our main benchmark for now, CASDE's forecasts will be used as an additional source of information as it will probably reveal to some extent some of the authorities goals in terms of trade and inventory management.

Grain production will decline in 2016/17 mainly due to the ongoing changes in policies and their impact on prices. Soybean output will benefit from these changes and will rise y-o-y for the first time since 2010/11.

Several agricultural sectors in the country are going through challenging times. Meat and dairy production is decreasing or slowing down due to structural inefficiencies and profitability challenges in the sector and some large-scale farm investments being cancelled or postponed. This is the case of Fonterra, which is changing its strategy regarding the development of dairy farms in China. In general in the feed, meat and dairy sector, large and efficient companies will ride out of the gloom, while backyard and small producers will be pushed out of business by rising labour and production costs as well as tightening bank loan requirements.

BMI Industry View
7
SWOT
10
Agribusiness
10
Industry Forecast
12
Grains Outlook
12
Latest Updates
12
Table: China - Grains Production And Consumption Outlook
13
Table: Risks To Outlook
14
Structural Trends
14
Table: Grains Production & Consumption (China 2013-2020)
17
Rice Outlook
18
Latest Updates
18
Table: China - Rice Production And Consumption Outlook
18
Table: Risks To Outlook
19
Structural Trends
19
Table: China Grains Procurement Prices (CNY/tonne)
20
Table: Rice Production & Consumption (China 2013-2020)
21
Oilseeds Outlook
21
Latest Updates
21
Table: China - Oilseeds Production And Consumption Outlook
22
Table: Risks To Outlook
23
Structural Trends
23
Table: Soybean Production & Consumption (China 2013-2020)
26
Table: Palm Oil Consumption (China 2013-2020)
26
Sugar Outlook
26
Latest Updates
26
Table: China - Sugar Production And Consumption Outlook
27
Table: Risks To Outlook
28
Structural Trends
28
Table: China - Sugarcane Floor Price
28
Table: Sugar Production & Consumption (China 2012-2020)
33
Cotton Outlook
33
Latest Updates
33
Table: China - Cotton Production And Consumption Outlook
34
Table: Risks To Outlook
34
Structural Trends
34
Table: Cotton Production & Consumption (China 2013-2020)
39
Dairy Outlook
40
Latest Updates
40
Table: China - Dairy Production And Consumption Outlook
41
Table: Risks To Outlook
41
Structural Trends
43
Table: Selected Countries - Milk Production Cost, USD/100 kg milk ECM
46
Table: Dairy Production & Consumption (China 2013-2020)
49
Livestock Outlook
50
Latest Updates
50
Table: China - Livestock Production And Consumption Outlook
52
Table: Risks To Outlook
53
Structural Trends
53
Table: Livestock Production & Consumption (China 2013-2020)
57
Commodities Price Analysis
59
Global - Global Commodities Strategy
59
Table: Select Commodities - Performance And Bmi Forecasts
59
Featured Analysis
61
13th Five-Year Plan: Implications For Agribusiness
61
Upstream Analysis
65
Asia GM Outlook
65
Table: Selected Countries - GM Crops Use (mn hectares)
68
Asia Machinery Outlook
70
Table: Select Countries - Average Size Of Farms, Hectares
74
Asia Fertiliser Outlook
77
Downstream Analysis
82
Food
82
Latest Updates
82
Structural Trends
83
Table: Food Sales (China 2013-2020)
85
Regional Overview
88
Competitive Landscape
93
Table: China - Major Agribusiness Companies
93
Demographic Forecast
95
Table: Population Headline Indicators (China 1990-2025)
96
Table: Key Population Ratios (China 1990-2025)
96
Table: Urban/Rural Population & Life Expectancy (China 1990-2025)
97
Table: Population By Age Group (China 1990-2025)
97
Table: Population By Age Group % (China 1990-2025)
98
Appendix
100
13th Five-Year Plan: Key Points
100
Summary Of Contents
100
Chapter 1: Overview
101
Table: Targets
101
Chapter 2: Innovation To Drive Development
102
Chapter 3: Economic Institutions
103
Chapter 4: Modernisation Of The Agricultural Sector
104
Chapter 5: Industries
105
Chapter 6: Expand The Network Economy
106
Chapter 7: Build A Modern Infrastructure Network
106
Chapter 8: New-Type Urbanisation
107
Chapter 9: Coordination Of Regional Development
108
Chapter 10: Environmental Protection
109
Chapter 11: Continue Opening Up
109
Others:
109
Methodology
111
Industry Forecast Methodology
111
Sector-Specific Methodology
112

The China Agribusiness Report features BMI Research's market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.

BMI's China Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.

Key Benefits

  • Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
  • Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.
  • Assess the activities and market position of your competitors, partners and clients.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, highlighting recent changes and key risks to the industry outlook.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the wider agricultural industry.

BMI Supply & Demand Forecasts

Divided into sections based on various diverse sectors in the agriculture market, the chapter provides insight into each market’s agricultural industry, centred on sector forecasts to end-2019 for the consumption, production and trade of key commodities.

  • Consumption Forecasts: Accompanied by a discussion of the main drivers of consumption growth: macroeconomic factors, food processing trends, price movements and increasingly, demand from the non-food sector.
  • Production Forecasts: Examine the trends influencing BMI’s production outlook: global demand, price increases, public and private sector investment and agricultural efficiency improvements.
  • Trade Forecasts: Accompanied by a discussion of the factors influencing a country’s trade in agricultural goods, including domestic demand, global prices and government trade policies.
  • BMI’s Forecasts: Accompanied by a risks-to-outlook assessment, which examines potential factors that could affect our existing forecast picture and the likelihood of their occurrence.

BMI’s Commodity Price Analysis

Fundamental and technical analysis of the short- and medium-term price outlook for eight agricultural commodities based on globally recognised benchmarks.

Downstream Analysis

Analysis of headline food and drink forecasts, including total food consumption, per capita food consumption and total sector trade, which provide important downstream intelligence for primary agricultural producers.

Featured Analysis

Includes relevant articles from BMI’s daily analysis service. These can include: long-term projections on agricultural imports and exports; our perceptions of the impacts of economic slowdown on key companies and subsectors within the Agribusiness industry in a given country; our analysis of fertilizer production; as well as other relevant analysis of recent news and events.

Competitive Landscape

The reports contain information on prominent companies operating in each market.

Key Commodities Covered By The Agribusiness Market

Reports Include: Grains, Dairy, Livestock, Rice, Sugar, Palm Oil, Edible Oils, Coffee, Cocoa, Cotton, Soybean

Please note – not all reports cover all commodities.

Sources

The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.