March 13, 2012

 

China's 2012 agricultural produce prices to remain firm

 

 

This year, the prices of agricultural products may see a steady trend amid a stable market supply, said Qian Keming, a Development and Planning Department official under the Ministry of Agriculture (MOA).

 

However, the country's grain market is seen to maintain a slightly tight supply and demand relationship in the long term.

 

So far this year, the domestic farm produce supply has not been as tight as that in the past years and prices have followed a smooth path, according to Qian, also a member of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC).

 

Lacklustre demand on the international market would have small effects in driving up prices of farm products, said Qian. Meanwhile, prices of agricultural production materials would be difficult to rise sharply.

 

However, with mounting labour cost, production cost is on the rise and this may moderately push up agricultural products prices.

 

"Weather and international oil prices are the most influential uncertainties for farm produce prices," said Qian.

 

"Now drought is still lingering in northeast China, but its impact on crops is limited as spring planting hasn't begun," stated the MOA official.

 

"Currently, the country's summer grain crops are growing well and the grain output in the full year of 2012 is likely to reach 525 million tonnes", noted Qian.

 

Qian predicted that grain and pig prices would have limited rise room this year. The trend of domestic edible oil prices would mainly depend on the international market as the country imported more than 70% of domestic soy demand. Macro economic situation and crude oil prices will also affect cooking oil prices in the following period.

 

Cotton prices are unlikely to see volatility as depressed world economy is suppressing growth of China's textiles exports, according to Qian.

 

China's grain market is expected to maintain a slightly tight supply and demand relationship in the long term, said Qian.

 

The country targets grain output of more than 572.5 million tonnes by 2020 to meet its consumption demand. That means it will increase grain production by at least four million tonnes annually to reach that target. In the light of this, China was facing tough tasks to ensure grain safety, stated Qian.

 

Supply and demand on the domestic paddy and wheat markets are basically balanced while that on the corn market has turned from loose to moderately tight. As the feed sector and the deep processing industry are developing, corn supply shortfall would gradually expand, noted Qian.

 

Meanwhile, the country would continue to keep a high dependency on soy imports with increasing consumption of edible oil and feeds, Qian added.