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China now an exporter of rice and wheat

Agriculture.com Staff 06/11/2008 @ 8:33am

USDA reports that China grows barley, corn, millet, oats, rice, sorghum and wheat.

Barley, millet, oats, and sorghum combined accounted for 4.6% of total grain production in 1990. Their share of national grain production dwindled to 2.2% in 2007. The stocks of these grains stood at 1.39 percent of their utilization in 1990, falling to 0.29% in 2007.

By way of contrast, in 2007 rice accounted for 33.3% of China's grain production. Virtually all of it was used for food consumption. In that same year, wheat accounted for 27.2% of China's grain production, 94% of which was used for food consumption. Corn was responsible for the other 37.3% of grain production, very little of which was used for direct human consumption.

What is interesting about the grains in China is the change that has taken place since 1990. Having looked at corn in an earlier column, here we shift our focus to the two primary food grains in China -- rice and wheat.

Between 1990 and 1999 domestic food consumption of rice steadily rose from 124 million tonnes to 134 million tonnes according to USDA Production, Supply, and Distribution numbers. Production rose as well, showing the expected year-to-year fluctuations. Harvested areas decreased from 81.7 million acres to 77.3 million acres while the yield increased by 11%.

During the 1990s China was a net exporter of rice in 8 of the 10 years. China's year ending stock-to-use ratio for rice fluctuated between 64% and 76%.

Beginning with the 2000 crop year, China's agricultural policies appear to have changed resulting in an 11.8 million acre reduction in rice harvested acres over the four year period 2000-2003. Rice production plummeted from 31.3 million tonnes to 26.5 million tonnes. Despite the decline in production China was a net exporter of rice in 3 of the 4 years in that period, exporting 2.7 million tonnes in the 2002 crop year.

China was able to feed its population and continue to export rice by drawing on its large stocks level. The year ending stocks-to-use ratio declined from 72.5% in 1999 to 33.2% in 2003.

Starting with the 2004 crop China began to increase the harvested area for rice, adding 4.5 million acres in that year alone. Between 2004 and 2007 the stock-to-use ratio was stabilized in the 28% to 29% range. China continued to meet its domestic needs for rice with a little left over for exports.

The wheat numbers tell a similar yet more interesting story. During the 1990s China increased its wheat year ending stocks-to-use ratio from 48.7% to 90.5%. This was done by importing massive amounts of wheat beyond domestic demand requirements. China was a net importer of wheat, shipping in over 60 million tonnes of wheat.

At the same time, domestic demand increased from 102.5 tonnes per year to 109.3 tonnes per year. Over that decade China's harvested acreage for wheat declined from 76 million acres to 71.2 million acres while the yield increased from 47.4 to 58.7 bushels per acre.

In the 2000-2004 period -- one year longer than with rice -- China's wheat acreage declined rapidly from 71.2 million acres to 53.4 million acres while yields stagnated in the 55 to 58 bushel per acre range before jumping to 63.6 bushels per acre in 2004. To meet domestic demand, China's year ending stocks of wheat declined from 94.1% to 38.1%.

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