October 28, 2005

 

China to increasingly import soy, corn by 2020
 

 

China is expected to continue to be able to produce all the paddy rice that it needs until 2020, at least, while domestic output of wheat, corn and soybeans will increasingly fall short of demand, a leading researcher at a government think tank said Thursday.

 

By 2020, China is projected to import a net 36.32 million tonnes of soybeans, 24.70 million tonnes of corn and 8.29 million tonnes of wheat while exporting a net 3.33 million tonnes of rice, said Cheng Guoqiang, deputy director general at Institute of Market Economy of the Development Research Center under the State Council.

 

For rice, the self-sufficiency ratio, or the ratio of production to demand, will rise to 104.5 percent by 2020 from 103.8 percent in 2000, Cheng told the World Rice Commerce 2005, which was organized by IBC Asia.

 

"I think much of the excess output will go to reserves for emergency needs, instead of exports," Cheng said.

 

China has been mostly a net exporter of rice. In 2004, however, it imported nearly 900,000 tonnes of rice and exported around 760,000 tonnes. The net import volume is considered negligible.

 

According to Cheng, Chinese policies will continue to support rice production because the country can't heavily rely on international trading, which averages just around 25-27 million tonnes each year.

 

China consumes around 180-190 million tonnes of rice a year.

 

For wheat, the self-sufficiency ratio is expected to fall to 85.1 percent by 2020 from 93.9 percent in 2000.

 

"It would be normal for China to import 7-8 million tonnes of wheat each year, as international supplies are much larger than in rice," Cheng said.

 

In 2004, China imported more than 7 million tonnes of wheat and exported less than 1 million tonnes.

 

The self-sufficiency ratio for corn was at 97.4 percent in 2000, and is likely to fall to 74.0 percent by 2020 due to rising meat demand, which in turn would boost orders for feed, and an expanding corn processing industry.

 

China exported 2.3 million tonnes of corn in 2004. It hardly imported any of the grain.

 

"High oil prices lead to more production of alcohol that is made from corn," he said.

 

Some provinces have started to mix ethanol derived from corn with oil products as a way of coping with soaring international oil prices.

 

It is also profitable to make ethanol from corn that has stayed idle in grain warehouses for years. However, much of such stale corn is said to have been used up recently.

 

For soybeans, Cheng said the self-sufficiency ratio was at 46.1 percent in 2000 and is expected to slip to 20.6 percent in 2020.

 

China imported around 20 million tonnes and exported several hundred thousand tonnes of soybeans in 2004. Domestic production totalled around 18 million tonnes that year.

 

Cheng's forecasts are based on the assumptions that annual economic growth would exceed 7 percent, the country's population would rise at a rate slower than 0.7 percent a year, and that the government would continue to support rice cultivation in its policies.