China's food climate index continued to fall in May from last month, and China should be vigilant against the economic downturn

In May, due to the deterioration of the internal and external environment, China's food climate index fell to 5.95, and it has declined 7 months. China should be vigilant against the economic downturn. The profit index played a significant role in maintaining the prosperity index.
1. Domestic food consumption: From January to May, the total retail sales of the catering industry was 1.76 trillion yuan, up 9.3% year-on-year, accounting for 10.88% of the total social consumption, which increased by 0.39% from the previous year; per capita food consumption was 1258 yuan/person, up 8.92% over the previous year. In May, food consumption totaled 363.1 billion yuan, a year-on-year increase of 9.4%. According to BOABC’s monitoring data, food consumption in May increased by 9.4%, and per capita food consumption was 260 yuan/month, an increase of 8.9% over the previous year.
Food retailing: From January to May, the retail sales of food commodities of commercial enterprises above designated size( with annual sales of over 5 million yuan, similarly hereinafter) was 816.5 billion yuan, up 3.0% year-on-year, accounting for 15.06% of the retail sales of enterprises above designated size. In the same period, the sales revenue of food commodities (including tobacco) of industrial enterprises above designated size (with annual sales of over 20 million yuan, similarly hereinafter) was 3.7607 trillion yuan, and the sales of food (including tobacco) of commercial enterprises above designated size accounted for 21.71%, an increase of 1.8% over the previous year. The sales of food commodities of above commercial enterprises accounted for 21.71% of that of industrial enterprises, up 1.8% from the previous year.
In May, the food sales of commercial enterprises above designated size was 153.2 billion yuan, down 3.7% year-on-year, accounting for 14.00% of their total retail sales of goods. The sales revenue of food commodities of industrial enterprises above designated size totaled 743.3 billion yuan in May. The sales of food of commercial enterprises accounted for 20.61% of that of industrial enterprises above designated size, up 1.12% from the previous year.  
Food retail sales of restaurants and enterprises above designated size: from January to May, food consumption was 2.57 trillion yuan, a year-on-year increase of 6.91%, accounting for 68.32% of the total sales of food enterprises above the designated size. The proportion of products of food industrial enterprises sold by large-scale commercial enterprises   increased by 7.89%.  Food consumption of enterprises above designated size accounted for 15.93% of the total consumption of the whole society, a decrease of 0.18% from the previous year.
In May, food consumption totaled 51.63 billion yuan, a year-on-year increase of 7.61%, accounting for 15.67% of the total social consumption and 69.46% of the monthly sales revenue of food enterprises above designated size.
Excluding the impact of price factors, consumer spending rose by 5.77% in the first five months of this year and by 5.74% in May. Among them, the real consumption of the catering industry increased by 1.58%, the retail sales of grains & oils rose by 3.21%, and the total food consumption dropped by 0.09%. The real consumption of food industry fell into negative growth again, indicating that the recent food price rise has had a negative impact on residents' consumption.
From January to march, China's market-oriented food consumption accounted for 7.41% of GDP, 12.89% of total household income and 19.91% of total household expenditure, which respectively decreased by 0.03%, 0.31% and 0.19 %.
Food consumption of urban and rural households: From January to March, rural household food consumption totaled 620.4 billion (up 4.5% over the previous year), while urban household food consumption was 1.775 billion (up 4.0% over the previous year), a total of 2.39 trillion (up 4.1% over the previous year). Household food consumption accounted for 24.5% of total social merchandise sales. Urban food consumption accounted for 23.9% of total urban household consumption, and rural food consumption occupied 43.1% of total rural household consumption. The high proportion of food consumption in residents' total consumption restricts consumption upgrades, especially in rural areas. It indicates that rural areas are still in poverty.
In May, total social consumption accounted for 34.3% of total social demand, up 1.4% year-on-year; total social consumption in January-March occupied 42.4% of total social demand, up 1.4% from the previous year. In the first quarter, domestic consumption accounted for 79.73% of gross resident income, and the consumption capacity of residents was consumed severely. Household consumption and social group consumption respectively accounted for 74.9% and 25.1% of the total social consumption. Social group consumption is the root of corruption and an important channel for unfair social distribution, and strict monitoring of social group consumption should be the top priority in the construction of official social integrity system.
Key enterprises：the data from the National Bureau of Statistics show that in the first five months, the total sales of catering enterprises above designated size reached 370.2 billion yuan, up 7.1% year-on-year, accounting for 21.09% of total catering consumption. In may, the sales of catering enterprises above designated size reached 75.5 billion yuan, up 7.1% year-on-year, accounting for 20.79% of total social catering consumption. Excluding the influence of price factors, the sales revenue of catering enterprises above designated size fell by 4.51% in May and by1.75% in the first five months. The decline in the actual sales of catering enterprises above designated size indicates that the current economy is not very ideal.
Food commodity sub-sectors of commercial enterprises above designated size in May: the monthly consumption of grain and oil products, beverages  , and tobacco and alcohol respectively registered at 109.3 billion yuan, 16.7 billion yuan, and 27.2 billion yuan, which respectively increased by 11.4%, 12.7%, and 6.6 % year-on-year. According to the monitoring data of BOABC, the consumption of grain & oil products, beverages, and tobacco & alcohol rose by 5.3%, 3.7%, and -2.2%, respectively.
From January to May, the cumulative consumption of grain & oil products, beverages, and tobacco & alcohol respectively reached 576.4 billion yuan, 80.4 billion yuan, and 159.7 billion yuan, which increased by 10.5%, 10.1%, and 5.6% from the same period last year. According to the monitoring data of BOABC, the accumulative consumption of grain & oil products, beverages, and tobacco & alcohol rose by 4.7%, 1.1% and 2.0% respectively in the first five months. Excluding the impact of price factors, the actual sales of commercial enterprises above designated size declined. The weak consumption capacity of residents seriously restricts the growth of consumption and the healthy development of the economy.
For large-scale commercial groups monitored by the Ministry of Commerce, their total retail sales increased by 2.8% in May, and the growths for the retail sales of food, beverages and alcohol were 5.2%, 5.1% and 4.6% respectively. Deducting the impact of price factors, the actual total retail sales grew by 0.69%, and the growths for food, beverages and tobacco & alcohol were -1.41%, 4.1%, and 3.60% separately. Negative growth in large companies has a significant negative impact on food industry.
In May, the national actual consumption of food industry decreased by 0.29%, a negative growth for two consecutive months, and couldn’t support the increase of food industry's business climate index.
Food exports: in May, the exports of agricultural and sideline foods, food manufacturing, alcoholic beverages and refined tea totaled 30.36 billion yuan ($4.44 billion), down 5.45% year-on-year (down 11.9%), accounting for 4.6% of the revenues of domestic enterprises above designated size. From January to May, the cumulative exports amounted to 141.08 billion yuan ($20.84 billion), a year-on-year decrease of 5.00% (11.6%), accounting for 4.36% of the operating income of domestic enterprises above designated size.
In May, the exports of agricultural and sideline foods, food manufacturing industry, and beverages registered at18.88 billion yuan, 9.16 billion yuan, and 2.32 billion yuan, which increased by 3.50%, 0.40%, and 9.5% from the same period last year respectively. In the first five months of 2019, the cumulative exports of agricultural and sideline foods, food manufacturing industry, and beverages were 88.72 billion yuan, 43.25 billion yuan, and 9.11 billion yuan respectively, rising by 3.40%, 4.90% and 5.0% year-on-year separately. According to BOABC’s monitoring data, the exports of agricultural and sideline food industry, food manufacturing industry, and beverages increased by -7.45%, -3.38%, and 4.04% in May respectively, and rose by -8.02%, 1.03%, - 1.30% in the first five months respectively. Overall, the contribution of the exports of food industry to its business climate index was negative.
2 Supply: From the perspective of domestic output, the added value of industrial enterprises above designated size increased by 5.0% in May. Specifically, the increase in the value added of agricultural and sideline food manufacturing, food manufacturing and beverages was 4.4%, 4.6% and 5.2% respectively.
Excluding the impact of ex-factory prices, the output of the whole society increased by 4.4%; the actual output of agricultural and sideline food manufacturing, food manufacturing and beverages rose by 2.76%, 2.85% and 4.06% respectively; the comprehensive output of food industry increased by 3.22%, a relatively low level.
3 Investment Status: in the first five months of 2019, the cumulative investments in agricultural and non-staple food manufacturing industry, food manufacturing, beverage industry, and accommodation & catering industry respectively registered at 326.28 billion yuan, 179.82 billion yuan, 116.19 billion yuan, and 169.4 billion yuan, increasing by -7.40%, -1.0%, 3.4%, and -8.30% from the same period last year respectively. In May, the investments in agricultural and non-staple food manufacturing industry, food manufacturing, beverage industry, and accommodation & catering industry respectively were 101.7 billion yuan, 51.9 billion yuan, 34.2 billion yuan, and 45.1 billion yuan, decreasing by 9.74%, 3.8%, 1.1%, and 6.31% year-on-year respectively. In May, the investments in food and accommodation industry totaled 232.9 billion yuan, a year-on-year increase of 6.6%; the cumulative investment from January to May was 791.7 billion yuan, down 4.7% year-on-year, accounting for 3.6% of total social investment.
Deducting the impact of price factors, the actual investment of the whole society fell by 0.4% in May, and the decreases in agricultural and non-staple food manufacturing industry, food manufacturing, beverage industry, and accommodation & catering industry were 10.34%, 4.44%, 1.69%, and 8.20% respectively, a total of 7.20%. The decline in investment in food industry since December, 2016 had a significant adverse impact on the business climate index of food industry.
4 Profit margin of grain processing: in May, the composite price of raw grain was 2253yuan/ton, while the wholesale price of processed grain registered at 3727yuan/ton, resulting in a price difference of 65.43%. Considering the price of energy, the gross profit margin of grain industry was 15.70% in May. The weighted average of the gross profit of processing industry was 615yuan/ton, and the gross profit of flour, japonica rice, indica rice, starch, and ethyl alcohol was 449yuan/ton, 1020yuan/ton, 606yuan/ton, 146yuan/ton, and 338yuan/ton respectively. In terms of gross margin by sector, the profit ratio of flour processing, japonica rice processing, indica rice processing, starch processing from domestic corn, and ethyl alcohol processing from domestic corn respectively registered at 6.63%, 21.48%, 15.59%, 5.86%, and 6.32%. Taking management fee of 150yuan/ton, average logistics fee of 160-300yuan/ton, and high financial costs of some large-scale enterprises , the net profit of rice and flour processing declined further.
Circulation: the retail price of flour remained at 5807yuan/ton, and the price for small package flour was 6253yuan/ton. The retail price of rice registered at 6455yuan/ton, and the price for small package rice was 6580 yuan/ton.
According to the wholesale prices, retail prices, and fuel energy indexes, we calculated the circulation profits. The gross profit margin of flour was 26.18%, and 27.11% for small package flour. The gross profit of flour circulation totaled 1574yuan/ton, including 157yuan/ton for first grade wholesalers, 394yuan/ton for second grade wholesalers, and 1023yuan/ton for retailers, and the gross profit of small package flour was 1932yuan/ton.  
In rice circulation, the gross profit margin of japonica rice was 20.41%, and 21.33% for small package japonica rice. As for the distribution of profits, the gross profit of rice circulation totaled 1318yuan/ton, including 132yuan/ton for first grade wholesalers, 416yuan/ton for second grade wholesalers, and 725yuan/ton for retailers, and the gross profit of small package rice was 1403yuan/ton.
Comprehensively considering consumption, investment, output, and profit margin, the business climate index of food index was 5.95 in May.