China to import more grain as stocks deplete ( 2004-01-05 13:31) (Agencies)
China will have to import more grain such as maize and wheat in '04 to
replenish depleting stocks and meet rising demand fuelled by heady economic
growth, officials and traders said on Sunday.
China has enjoyed grain surpluses over the past few years, but supply and
demand will reach a balance this year or next as farmers struggle to achieve
targetted five-per cent growth in grain production to 455m tonnes in '04, they
said.
“In the past few years, we've been digging into our reserves to plug the
grain shortfall caused by an output fall and exports,” said Gao Tiesheng, deputy
head of China Market Institute, which conducts research on China ’s economy.
Grain output has fallen short of 500m tonnes for the past four years,
with '03 production seen at an estimated 10-year low of 435m tonnes,
prompting the government to use its reserves to fill the shortage, officials
said.
“The government's aim to achieve 455m tonnes of grain output this year isn't
easy. Nowadays, some farmers would rather find other jobs than slog in the
fields,” said a grain official who declined to be identified.
China 's grain stocks were 250m tonnes in '02, but have since diminished to
150-200m tonnes and are seen heading towards 100m tonnes soon, officials and
analysts said at a grains conference in Shanghai.
"We'll definitely see China importing more grains this year because there is
no way it can keep relying on its stocks to make up for the shortage,” said an
industry source.
"Foreign producers stand a good chance of selling more grains to China
this year, especially wheat. They haven't been importing a lot of it and stocks
are falling,” he said. The market is expecting China, a net exporter of maize,
to start importing it this year and also to purchase more than three million
tonnes of wheat, traders at the conference said.
China 's imports of agricultural products have been low, disappointing global
markets, even as it pledged to open up the protected farm sector after joining
the World Trade Organisation in late ’01. Since WTO entry, China has only used a
fraction of its low-duty import quotas, or tariff-rate-quotas (TRQs) for farm
products potentially totalling millions of tonnes.
In 2003, firms applied for only 6.7% of wheat TRQs totalling 9.2m tonnes,
0.2% of total corn TRQs of 6.5m tonnes and 7.5% of rice quotas of 4.7m tonnes,
the official said. But China would have to turn to global markets soon to feed
its 1.3bn people, who are expected to consume 4.9m tonnes of grain this year.
That figure is expected to rise by one per cent annually to surpass 500m tonnes
in 2006, officials said.
