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 swelling, as the country has a growing 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 .

Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)
e/f = BMI estimate/forecast. Source: BMI, FAO

Key Forecasts

  • Corn production growth to 2018/19: 11.0% to 242mn tonnes. Given the decrease in government support for corn production, output expansion will be driven by steady improvements in yields and the probable adoption of genetically modified corn varieties in the coming years. However, strong consumption expansion means China will fall into a production deficit by the end of our forecast period, totalling around 5mn tonnes.

  • Pork production growth to 2018/19: 13.3% to 64.2mn 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 2019: 19.8% to 19.4mn tonnes. Consumption will be boosted by rising incomes, which will support demand for products in key industries, such as the confectionery, dairy, beverages and food processing.

  • BMI universe agribusiness market value: USD1.42trn in 2016 (up 4.9% compared with 2015, growth forecast to average 4.6% annually between 2016 and 2019).

  • 2016 real GDP growth: 6.3% (down from 6.7% expected in 2015, forecast to average 6.0% between 2016 and 2019).

  • 2016 consumer price inflation: 1.5% y-o-y ave (up from 1.3% expected in 2015, forecast to average 2.2% between 2016 and 2019).

Key Developments

Agricultural production in China has recorded exceptional growth over recent years, driven by an expansion in area cultivated and strong growth in productivity. However, output growth is slowing down in some of the largest producers, due to pollution and land constraints. The government has acknowledged the challenge and is more reformist than ever. In 2015, China has continued to amend its stockpiling policy and will accelerate its reforms to partially liberalise land and prices, which will enable the country to maintain an elevated level of food self-sufficiency.

Still, the sector has faced challenges. Meat and dairy consumption has been hit amidst low supply, elevated prices and the ongoing crackdown on red tape and government receptions, which have supported demand in recent years. Headwinds will persist as China's GDP growth continues to slow down and consumer trust in food safety dwindles. In addition, food ingredients prices are increasing, labour costs are soaring and bank loan requirements for small sized enterprises are tightening.

As part of China's ongoing efforts to reform its agriculture towards a more efficient and market-driven sector, the government is in the process of reforming its agricultural policy regarding production support and imports. One of the main changes relates to corn policy. The government is slowly releasing details of this new agricultural policy.

In recent months, the government announced that China would continue to ensure that about 95% of its wheat and rice is grown at home, and it will maintain its minimum purchase price policy for these commodities. Meanwhile, the government seems to have taken a less strict stance on corn self-sufficiency. The government decided to decrease the minimum support price for corn in 2015/16, while it will maintain support to rice and wheat production. Due to these changes, corn production will post weak growth in the upcoming 2016/17 season, for which plantings will start in Q116. However, the government's goal to draw down domestic corn stocks will keep a lid on corn and wheat imports in 2016/17. We have revised up our wheat production forecast for 2016/17, as farmers will switch from cotton to wheat.

China is changing its stance on food imports and showing signs that it is ready to accept larger volumes of imports in the coming years. In order to mitigate its reliance on foreign resources, the country is diversifying its import base and looking at controlling the trade supply chain by investing in commodities trading houses ( China National Cereals, Oils and Foodstuffs Corporation acquired a majority stake in food traders Nidera and Noble Group in 2014) and international food producers ( Shuanghui acquired US pork producer Smithfield in 2013).

BMI Industry View
7
SWOT
10
Agribusiness
10
Industry Forecast
12
Grains Outlook
12
Table: China - Grains Production And Consumption Outlook
13
Table: China - Risks To Grains Outlook
13
Table: Grains Production & Consumption (China 2011-2019)
18
Rice Outlook
19
Table: China - Rice Production And Consumption Outlook
19
Table: China - Risks To Rice Outlook
20
Table: China Grain Procurement Prices (CNY/tonne)
21
Table: Rice Production & Consumption (China 2011-2019)
22
Oilseeds Outlook
23
Table: China - Soybean Production And Consumption Outlook
23
Table: China - Risks To Soybean Outlook
24
Table: Soybean Production & Consumption (China 2011-2019)
27
Sugar Outlook
28
Table: China - Sugar Production And Consumption Outlook
28
Table: China - Risks To Sugar Outlook
29
Table: Sugar Production & Consumption (China 2011-2019)
32
Cotton Outlook
33
Table: China - Cotton Production And Consumption Outlook
34
Table: China - Risks To Cotton Outlook
34
Table: Cotton Production & Consumption (China 2011-2019)
38
Dairy Outlook
39
Table: China - Dairy Production And Consumption Outlook
39
Table: China - Risks To Dairy Outlook
40
Table: Dairy Production & Consumption (China 2011-2019)
46
Livestock Outlook
48
Table: China - Livestock Production And Consumption Outlook
49
Table: China - Risks To Livestock Outlook
50
Table: Livestock Production & Consumption (China 2011-2019)
54
Commodities Price Analysis
56
Global Commodities Strategy
56
Table: Select Commodities - Performance And BMI Forecasts
56
Upstream Analysis
58
Asia Machinery Outlook
58
Table: China Grain Public Production Support Programme (Cnybn)
61
Table: Select Countries - Average Size Of Farms, Hectares
61
Asia Fertiliser Outlook
64
Asia GM Outlook
68
Table: Selected Countries - GM Crops Use (mn hectares)
71
Downstream Analysis
72
Food
72
Table: Food Consumption Indicators - Historical Data & Forecasts (China 2012-2019)
73
Confectionery
74
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (China 2012-2019)
75
Regional Overview
77
Table: Impact Of El Ni-o On Crops
81
Competitive Landscape
83
Table: China - Major Agribusiness Companies
83
Demographic Forecast
84
Table: Population Headline Indicators (China 1990-2025)
85
Table: Key Population Ratios (China 1990-2025)
85
Table: Urban/Rural Population & Life Expectancy (China 1990-2025)
86
Table: Population By Age Group (China 1990-2025)
86
Table: Population By Age Group % (China 1990-2025)
87
Methodology
89
Industry Forecast Methodology
89
Sector-Specific Methodology
90

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.