China has more-than-ample supplies of wheat - but appears to be running low on corn after all, with a call from a senior grains executive for curbs on exports and industrial use of the crop.
China's wheat stocks are running at about 100m tonnes – nearly one year's supply - Zhang Ping, the head of the National Development & Reform Commission, the country's top economic planning group said.
The figure compares with the figure of 60m tonnes at which the US Department of Agriculture believes China will end 2010-11, and comes amid easing concerns too for the country's winter wheat crop, whose condition is reported to have vastly improved following rains and irrigation.
"We've got abundant grain stocks, which sets a solid foundation for us to keep grain prices basically stable," Mr Zhang said.
'Outstanding problems'
However, he pegged China's overall reserves of grains at 40% of national consumption, implying significantly lower inventories of crops other than wheat. China typically also includes corn, rice and soybeans in the grains category.
And, separately, Bao Kexin, the president of China Grain Reserves Corporation, or Sinograin, which manages the national stocks, said that while overall grain reserves were sufficient, those of corn held "outstanding problems".
While failing to put a figure on corn inventories, Mr Bao urged restrictions on exports of the grain, as well as the manufacture of products such as ethanol and starch based on the crop.
"Corn shall be used mainly for animal feed and large volumes used for industry should not be allowed," he said, according to the Xinhua news agency.
He also highlighted the country's "limited" agricultural area, and urged the government to guarantee at least 1.8bn mu, equivalent to about 120m hectares, of farmland from the spread of urbanisation.
'Worrying trend'
Mr Bao's comments follow persistent speculation that China, which imported US corn in significant quantities last year for the first time since the mid-1990s, will remain reliant on foreign supplies.
The US Grains Council believes China's imports could rise from 2m-3m tonnes in 2010 to 6m-9m tonnes this year, while Standard Chartered two weeks ago said the "larger imports will be required to reverse the decline in stocks".
"The trend in China's corn stocks is worrying," Standard Chartered analysts Abah Ofon and Koun-Ken Lee said.
The prospect of extra Chinese demand is viewed as highly significant among investors in the US, the top corn exporter, where supplies as it is are forecast to end 2010-11 at a multi-year low of 17.1m tonnes.
Data question
On the wheat stocks estimate, Agritel, the Paris-based analysis group, said it appeared that authorities had "minimised" fears over supplies stoked by the winter wheat setbacks.
However, it added that "these figures can hardly be checked through other sources". China's official crops data is widely questioned abroad for its reliability.
China is the biggest producer and cnsumer of wheat, ranking on corn second to the US on both scores.
No comments:
Post a Comment