China Flour Production and Wheat Balance Sheet in Nov. 2013

By CnAgri2013-12-31 09:30:16 Print

According to statistics data, flour production by medium and large sized enterprises increased both YOY and MOM in Nov.. Boom season for flour consumption has come.
　　
Flour production by medium and large mills registered 12.0012 million MT in Nov., calculated by historical data, it was 0.93% more than the same period of last year and 3.3% more than the month before . Rice production totaled 119.75 million MT in Jan. ~ Nov., an increase of 5.89% on the year-on-year basis. (Note: according to published data, the monthly growth rate was 2.04% and accumulative production, 119.663 million MT, up 4.40% YOY). Thereby, medium and large mills consumed 16.218 million MT wheat in Nov. and 161.8 million MT in Jan. ~ Nov.
　　
Deducting repetitive statistics, BOABC estimates that flour production and wheat consumption were about 7.001 million MT and 9.461 million MT respectively in Nov.

In Nov., taking 30 days operation as full capacity, the average operating rate of flour enterprises was 47.5%, of which, small enterprises ran at 25.1% operating rate with production of 334,000 MT and medium and large mills 48.2% with production of 6.667 million MT. In 2012, taking 350 days operation as full capacity, the total capacity of processing wheat was 235.5 million MT , of which, capacity of medium and large enterprises was 215 million MT and small enterprises 21.38 million MT.
　　
Wheat consumption for various uses was estimated to be 10.983 million MT in Nov., of which, consumption for seeds in SC was 540,000MT. Rice imports were 968,000 MT and 5.118 million MT respectively in Nov. and Jan.-Nov.. Wheat import is estimated to be 6 million MT in 2013/14, significantly more than last year’s 4.75 million MT. Wheat inventory was 89.512 million MT at the end of Nov., suggesting a stock index of 8.5, both higher than the same period of last year.
　　
In Nov., wheat purchased with protective procurement price and for temporary reserves auctioned 3.67 million MT, mostly export of good quality wheat in Henan. 4.23 million MT grains were de-stocked; as for new grain purchase, most were imported for state reserves. The inventory consisted of 49.987 million MT state-owned enterprises’ stock, 11.35 million MT flourmills’ stock, 4.5 million MT traders’ stock and 23.62 million MT farmers’ stock. 81.32% of farmers’ new wheat was sold, slightly lower than the same period of last year.
　　
Wheat price was RMB2,548/MT in Nov. and RMB2,462/MT in May ~ Nov., up 13.12% and 13.12% respectively on the year-on-year basis. Grain price will keep relatively high later influenced by national policy.
　　
Wheat production is estimated to be 118 million MT in 2013/2014, down 2.33% on the year-on-year basis though planting acreages increased. Besides, production of wheat suitable for flour making declined greatly, causing demand increase for wheat imports.  Wheat consumption is predicted to be 122 million MT in the year, including 8 million MT for feed use. Year-end wheat inventory is predicted to be 43.603 million MT, suggesting a safety index of 35.7%. Wheat price may keep high later, averaging RMB2,467/MT in the year, up 9% on the year-on-year basis.
　　
Domestic good quality wheat production was 69.522 million MT, 61.875 million MT of which flew to market. Besides, increase of wheat imports also gave rise to good quality wheat supply, registering 87.052 million MT, 62.386 million MT of which was used for making flour and 24.539 million MT was year-end inventory, suggesting a safety index of 39.25%.
　　
　　Winter wheat acreage is estimated to be 22.538 million hectares and spring wheat acreage in next spring is predicted to be 1.729 million hectares, up 0.45% and 6.38% respectively on the year-on-year basis. Total acreage is 24.367 million hectares, up 0.85% YOY. Wheat production is predicted to be 124 million MT next year, up 5.28% on the year-on-year basis. Year-end inventory and safety index were 44.734 million MT and 35.7% respectively. Driven by increase of protective procurement price, wheat price in new crop year shall keep increasing to RMB2590/MT with growth rate of about 5%. 
　　
In 2014/15, good quality wheat production shall increase significantly to 85.426 million MT, 70.9 million MT of which will be consumed. Year-end inventory and safety index are 31.804 million MT and 48.45% respectively.



From “China Grains Market Weekly Report”