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Hotspot Analysis

By CnAgri 2019-09-03 11:04:32 Print Tel:861064402118-822 Email: chen.wang@boabc.com

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Brief Introduction:

Table of Contents:

1 NBS announces decrease of early rice output, area and yield; total yield close to BOABC estimated number

On August 26, NBS announced the production of early Paddy. According to the actual sampling survey, the farming area, yield per unit area and total output in 2019 are as follows: the farming area was 4,450,000 ha, down 341,300 ha or 7.1% year on year; the yield per unit area was 5902 kg/ha, down 64.8 kg/ha or 1.1%; the total output was 26,270,000 million tons, down 8.1% or 2.325 million tons from 2018. 
According to BOABC’s monitoring, the farming area, total output and yield of early indica rice were 4.97 million ha, 26.899 million tons and 5412 kg/ha, respectively down 5.44%, 8.80% and 3.55%. Floods in the Yangtze River basin in early July resulted in national early rice production reduction. According to the statistics bureau, the reasons for the decrease of early rice sowing area mainly include: first, local governments actively promote the agricultural supply-side structural reform, appropriately adjust and reduce the planting of low quality and low efficiency early rice, and plant high-quality and efficient single cropping rice or other special cash crops; second, due to the low efficiency of early rice planting, the high labor intensity of "double harvest" and the shortage of rural labor force, some farmers replaced "double cropping rice with single cropping rice"; third, during the early rice sowing and transplanting period, the rainy weather in Hunan, Jiangxi and Guangdong affected the spring sowing progress, resulting in the decrease of early rice sowing area in some areas.
In addition, early rice yield per unit decreased slightly. The per unit yield of early rice this year was 5902 kg/ha, 64.8 kg/ha lower than that of 2018, or 1.1% lower. Early rice yield per unit was lower than that of the previous year, but it was still the second highest in history. The per unit yield decrease of early rice resulted in national output decreasing by 288,000 tons, accounting for 12.4% of the total yield reduction.
The main reason for the decrease of yield per unit area was the poor agrometeorological conditions during the early rice growth. First, during the replanting period of early rice, there was more precipitation, less sunshine and weak growth of early rice in Hunan and Guangdong. Second, during the jointing and heading period, the main early rice producing areas suffered continuous rainfall, which was not conducive to early rice flowering pollination, and the seed setting rate of rice ears decreased in some areas. Third, during the grain-filling harvest period, regions south of the Yangtze River and south China suffered continuous rainfall, and early rice fields in some areas suffered floods of different degrees, which not only was not conducive to early rice grain-filling, ripening, harvesting and drying, but also caused a decline in quality.
Since the yield of early rice only accounts for about 4% of the annual grain yield, the impact of the reduction of early rice yield on the annual grain yield is limited. The low yield and poor quality of early rice indicate the slow progress of rice planting technology in China. To raise the level of agricultural productivity and improve the overall economic competitiveness, we must take raising the level of yield per unit area as an important index, improve the quality of grain on the basis of the substantial increase in yield per unit area, and further improve the grain production efficiency. Due to the stagnation of the research on rice planting and seed industry in China, the productivity of the rice planting industry declined relatively, leading to a serious decline in the international competitiveness of China's rice industry. China has changed from rice exporter into rice importer. The changes in the rice industry need to be paid great attention to.

2 Wheat output and purchase volume up greatly, early rice output and purchase volume down 

NBS data show that as of August 20, a total of 58.974 million tons of wheat had been purchased in major wheat producing areas, an increase of 17.123 million tons compared with the same period last year. Monitoring by BOABC shows that the 2019/20 area of wheat in China is 24.481 million ha, up 3.83% from the previous year; the output was 137.3 million tons, up 7.15% from the previous year. Among them, the winter wheat area was 23.010 million ha, up 4.07% year on year; the output 131.09 million tons, up 7.48%; the yield per unit area was 5697 kg/ha, 3.27% higher than the previous year. The farming area of spring wheat was 1.471 million ha, up 0.14%; the output was 6.179 million tons, 0.69% higher than that of the previous year; the yield per unit area was 4,201 kg/ha, down 0.49% from the previous year.
In 2019, the increase of national wheat output brings abundant grain sources, while the quality of wheat was greatly improved, and grain enterprises increased their wheat stocks. In terms of provincial grain purchasing condition, Jiangsu acquired 11.739 million tons, an increase of 1.88 million tons year-on-year; Anhui acquired 9.123 million tons, an increase of 4.44 million tons year-on-year; Henan acquired 16.509 million tons, up 7.645 million tons year-on-year; Shandong acquired 8.433 million tons, an increase of 1.384 million tons year-on-year; Hubei acquired 1.403 million tons, up 72,000 tons year-on-year; Hebei acquired 5.53 million tons, up 1.861 million tons year-on-year.
At present, the domestic food prices increase obviously, the prices of all kinds of edible agricultural products rise sharply, and the price of wheat and flour is expected to rise, too. Despite the serious shortage of national agricultural credit, all kinds of market players raise funds to increase the purchase of wheat. In terms of market entities, state-owned enterprises are estimated to purchase 29.5 million tons; the purchase volume of the minimum purchase price wheat is expected to be 18.71 million tons. It is estimated that by the end of September, the total wheat purchase may reach 75 million tons, with the minimum purchase price wheat of 23 million tons. 
By August 20, a total of 3.463 million tons of early indica rice had been purchased in the main production areas, a year-on-year decrease of 1.655 million tons.
The low temperature and rainfall during early harvest period resulted in a significant decline in output and a delay in maturity and harvest time, resulting in about 10 days' delay in sales progress. The purchase volume may significantly reduce to about 400,000 tons, a decline of about 10%, which is consistent with production decline.

3 Importance of state-owned enterprises strengthened in grain purchase,  developed areas have obvious advantages in grain distribution

State Grain Administration announced that state-owned enterprises purchased grain of 18.81 million tons in June, up 46.17 percent from the same month last year. In terms of provinces, state-owned enterprises in Jiangsu, Anhui, Henan and Shandong purchased 4.9 million tons, 3.275 million tons, 2.985 million tons and 2.65 million tons respectively, an increase of 23.24%, 3.98 times, 27.5% and 38.5% over the previous year. In addition, the purchase volume in Beijing and Hebei was also large, with 755,000 and 990,000 tons respectively, up 49.2% and 45.59%. The grains purchased by Beijing and Hebei are produced in Hebei. 
The cumulative grain purchase volume from January to June 2019 was 59.965 million tons, up 42.9% over the previous year. Heilongjiang, Jilin, Jiangsu, Shandong, Anhui and Henan exceeded 4 million tons. The purchase volume of Beijing, Liaoning, Hebei, Inner Mongolia and Shaanxi ranged between 1.885~3.69 million tons. The state-owned enterprises of the above provinces purchased grain of 54.445 million tons, accounting for 90.46% of the total purchases of state-owned enterprises, representing an annual increase of varying degrees over the previous year.
In terms of crop year, the 2018/19 (May-April) purchase volume was 135 million tons. Heilongjiang, Jiangsu and Jilin exceeded 10 million tons, and respectively purchased 29.831 million tons, 13.136 million tons and 12.964 million tons. Henan, Anhui, Shandong, Beijing and Liaoning exceeded 5 million tons and were respectively purchased 9.603 million tons, 8.475 million tons, 7.79 million tons, 7.52 million tons and 6.621 million tons. Hebei and Inner Mongolia respectively purchased 4.989 million tons and 4.874 million tons. The total purchase volume of the above provinces was 105 million tons, accounting for 77.39% of all grain purchases by state-owned enterprises.
The 2019/20 May-June national grain purchase volume was 2.235 million tons, up 32.29% from the same period last year. Among them, Jiangsu, Shandong, Anhui and Henan exceeded 3 million tons and respectively purchased 5.075 million tons, 3.735 million tons, 3.445 million tons and 3.235 million tons. The four provinces purchased 15.49 million tons, accounting for 68.4% of the total. Beijing and Hebei purchased more than 1 million tons, 1.33 million tons and 1.3 million tons respectively. The purchase volume of the above-mentioned provinces was 18.12 million tons, accounting for 80% of the total purchases by state-owned enterprises.
Grain sales of state-owned grain enterprises: total grain sales volume by state-owned grain enterprises in June was 29.71 million tons, down 23.19% year on year. The sales volume through the state's bidding platform in June was 12.965 million tons, with public bidding accounting for less than 50% of the total outbound quantity of state-owned grain enterprises.
The state-owned enterprises’ grain sales volume in Heilongjiang, Jiangsu, Liaoning and Beijing exceeded 2 million tons, respectively 4.22 million tons, 3.14 million tons, 2.63 million tons, 2.44 million tons, down 50%, 20.7% and up 6.7% and 23.0% respectively over the previous year. In addition, the sales in Guangdong, Jilin, Zhejiang, Inner Mongolia and Shanghai exceeded 1 million tons. The state-owned grain sales in the 9 provinces and regions accounted for 69.22% of the total grain sales of state-owned enterprises. From January to June 2019, China's state-owned grain enterprises sold 154 million tons of grain, down 8.47% from the same period last year. Among them, the grain sales volume of Jiangsu, Heilongjiang, Beijing, Liaoning and Guangdong exceeded 10 million tons, respectively 17.765 million tons, 16.87 million tons, 12.97 million tons, 10.495 million tons and 10.055 million tons, aggregately accounting for 44.3% of the total grain sales of state-owned enterprises, and respectively down 2.3%, 37.0% and up 21.37%, 0.77% and 9.9% year on year. In addition, the sales volume of Shandong, Jilin, Zhejiang, Henan, Fujian, Anhui and Shanghai exceeded 5 million tons again. The total sales volume of the above-mentioned provinces was 114 million tons, accounting for 74.34% of the total grain sales volume of all state-owned enterprises.
In the crop year of 2018/19 (May to April), the grain sales in China totaled 400 million tons, the largest annual sales of state-owned enterprises. The annual sales of state-owned enterprises accounted for 62% of the total grain sales in the crop year. State-owned grain enterprises are the main channel of domestic grain distribution. The increase of the proportion of state-owned grain enterprises in grain distribution leads to the decrease of the active degree of market subjects.
In terms of province, state-owned enterprises’ annual grain sales in Heilongjiang, Jilin, Jiangsu, Liaoning, Beijing and Guangdong exceeded 20 million tons, respectively 64.274 million tons, 50.055 million tons, 40.82 million tons, 28.43 million tons, 24.156 million tons and 23.334 million tons, totaled 231 million tons, accounting for 57.8% of state-owned enterprises’ grain sales. In addition, Inner Mongolia, Zhejiang, Shandong, Fujian, Henan, Anhui and Shanghai exceeded 10 million tons, between 10.367~18.604 million tons. The grain sales of state-owned grain enterprises in the above regions totaled 329 million tons, accounting for 82.2% of national grain sales.
The 2019/20 May-June state-owned enterprises’ grain sales volume was 56.71 million tons, down 24.65% year-on-year. Among them, the sales volume in Heilongjiang, Jiangsu and Beijing exceeded 5 million tons, respectively 6.455 million tons, 6.11 million tons and 5.01 million tons, down 60.8%, 18.0% and up 28.1% respectively over the previous year. In addition, the sales volume in Liaoning, Guangdong, Jilin and Shandong exceeded 3 million tons, respectively 4.075 million tons, 3.405 million tons, 3.2 million tons and 3.135 million tons. The total sales volume in the above regions accounted for 55.38% of the total. To conclude, economically developed areas are also active areas of grain distribution.
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