DUBLIN--(BUSINESS WIRE)--Dublin - Research and Markets (http://www.researchandmarkets.com/research/v7dgv6/china_agribusiness) has announced the addition of the "China Agribusiness Report Q2 2012" report to their offering.
BMI View: China's agriculture industry will continue to be strongly affected by government policies which aim to ensure national food security. However, the government's recent acknowledgment of the need for higher corn imports shows its gradual acceptance of the fact that it will grow inevitably dependent on imports. Verbal acceptance of genetically modified (GM) seeds is an indicator of a slight recalibration of the government's previously staunch stand against GM products.
Key Forecasts
- Rice production growth to 2015/16: 3.5% to 141.9mn tonnes. Investment in research into alternative means of rice production, which would depend less on paddy fields, is being considered. Furthermore, the possibility of increased export opportunities will incentivise farmers to keep output stable over the long term.
- Pork production growth to 2015/16: 30.0% to 64.2mn tonnes. Continued consolidation of the Chinese meat industry is likely to support large-scale production and increase economies of scale in production. This will help to meet the growing demand of a national diet that is increasing its protein intake.
- Corn production growth to 2015/16: 15.3% to 204.4mn tonnes. Vigorous investment from the public and private sectors in technology and processes has resulted in corn yields witnessing steady improvement. This is likely to provide support for expanding production.
- 2012 real GDP growth: 7.5% (from 9.2% in 2011)
- 2012 consumer price inflation : 3.2% ave (from 5.6% in 2011)
- 2012 central bank policy rate: 6.06% ave (from 6.56% in 2011)
Industry Developments
We believe that China is likely to increase imports of soybeans in 2011/12 on the back of a higher production deficit. Indeed, we forecast soybean consumption in excess of 70.6mn tonnes in 2011/12, a 7.1% year-on-year (y-o-y) increase. Soybean crushing capacity is also expected to increase more than 10% y-o-y, from 112.5mn tonnes in 2011 to 125mn tonnes in 2012, indicating that the country is preparing for high import volumes. According to the China National Grain and Oils Information Centre, imports are forecast to rise from 52.8mn tonnes in 2010/11 to 58.5mn tonnes in 2011/12.
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