China Aims To Boost Grain, Meat Output By 2015
China is targeting an 8% rise in grain production capacity by 2015 from 2010 levels and has kept unchanged its 95% grain self-sufficiency rate target, the Ministry of Agriculture said Friday.
The world's largest grain consumer is facing challenges in stabilizing grain production amid rising demand and declining arable area due to rapid urbanization.
Grain output reached 546.4 million metric tons in 2010, rising for the seventh year in a row, and China is now aiming at an annual capacity of more than 540 million tons in the 12th Five-Year Plan [2011-2015], from around 500 million tons in 2010, the ministry said in a statement on its website.
"Guaranteeing supply of grain and other major agricultural products will remain top priority [between 2011 and 2015]," it said.
The government also aims to maintain grain acreage above 1.07 billion hectares by 2015, compared with actual acreage of 1.1 billion hectares last year.
Demand for corn is growing faster than domestic supply of the most popular animal feed, amid a rise in meat consumption.
China has reportedly bought more than 3 million tons of corn from the U.S. so far this year to replenish reserves, more than twice the total imports in 2010. Its annual corn output is around 180 million tons.
It is also aiming to boost cotton output to more than 7 million tons in 2015 compared with actual output of 5.96 million tons in 2010, the ministry said. China is the world's largest cotton importer.
The ministry said the country's 2015 oilseed output target would be 35 million tons compared with 32.3 million tons in 2010, in its attempt to stabilize edible oil self-sufficiency rate at about 40%.
China's edible oil self-sufficiency is only 37%, industry data showed.
Output of sugar crops, which include sugar cane and sugar beets, is expected to reach 140 million tons compared with actual output of 120 million tons in 2010.
The ministry said it aims to raise meat output--including pork, beef and poultry--to 85 million tons in 2015 from 79.3 million tons in 2010.
NE Australian Wheat Crops Remain Of Concern
Wheat crops in dry soils in northern New South Wales and Queensland states remain a matter of concern despite rainfall in some areas over the past week or so, Michael Southan, general manager of grower development at lobby and services concern Grain Growers Ltd., said Friday.
"It's really northern New South Wales and parts of Queensland that are getting quite desperate" for rain, he said in a telephone interview.
Other factors to watch include how quickly the weather warms up during the spring growth period and the amount of damage that mice inflict on crops, he said.
Crops in the northern wheat belt of Western Australia are in pretty good shape, though crop quality in that state deteriorates to the east and the south, while crops in South Australia and Victoria states are generally in good condition, Southan said.
"We're still going to need some good rains through spring to get the crops home," he said. "The potential is still there for a good harvest, but there's still so much variability."
As for national production, the spring rains will determine whether output will reach the 21.8 million metric tons forecast this week by National Australia Bank Ltd. (NAB.AU), the 23.5 million tons estimated by Commonwealth Bank of Australia (CBA.AU) or a 26.2 million tons projection by the Australian Bureau of Agricultural and Resource Economics and Sciences.
Actual output last crop year ended March 31 was a was a record 26.3 million tons, and production from the new crop will help determine export availability in Australia, usually one of the world's top five wheat exporters after domestic demand of 6 million tons is met.
Indian Panel May Consider Wheat, Rice Exports
An Indian ministerial panel may consider allowing wheat exports as well increasing shipments of common-grade rice by private traders on Sept. 6, Food Minister K.V. Thomas said Friday.
"We are open to allowing 1.0 million tons of parboiled rice as well as 1.0 million tons of ordinary rice," Thomas told Dow Jones Newswires, adding that small quantities of premium rice exports may also be permitted.
He said the food ministry is also in favor of allowing 2.0 million tons of wheat exports.
Ukraine Wheat Crop Quality Questioned
Ukraine's 2011-12 wheat crop may be more than half feed wheat due to poor weather during the harvest, local analyst UkrAgroConsult said in a report Friday.
UkrAgroConsult expects milling wheat to make up 40% to 45% of the crop, down from 55% a year earlier. Traders say even that could be optimistic, with some predicting feed wheat will account for 70% of the harvest.
In August, the country's farm ministry forecast the share of milling wheat in this year's bumper harvest would be 70%, up from its estimate of 60% a month earlier.
Talking Points
India Cautious About High Food Inflation
The Indian government is "cautious" about high food inflation but that won't weigh on grain export prospects, Food Minister K.V. Thomas said Friday.
The comments come a day after government data showed that wholesale price index-based food inflation in the week ended Aug. 20 accelerated to 10.05% from a year earlier. That compares with a 9.80% rise in the previous week and is the highest level in more than four months.
Thomas told Dow Jones Newswires that inflation was being driven by problems in supplies of vegetables including onions in some regions, but added that it wasn't worrying. The long-term solution to curbing food prices is to improve storage and processing capacities, he said.
Analysts say food prices are high mainly because of poor management as the government's grain stocks have piled up to nearly double its requirement and state-run warehouses have run out of space.
Also, nearly a third of the country's fruit and vegetable produce goes waste due to lack of cold chains and efficient transport linkages between producing and consuming centers.
Some relief from high food prices is expected in coming months with the country expected to receive normal monsoon rain this year, after a pick up in the second half of the June-September rainfall season that is the main source of irrigation for most farm land.
"Food inflation should come down, but the point is to what level. I don't see it coming below 7%-8%," said D.H. Pai Panandikar, an economist and president of the RPG Foundation, a think tank.
"The worry is that the frequency of price hikes in fruits and vegetable is increasing," he said, attributing it to both supply shortages as well as huge gaps between retail and wholesale prices.
Food Minister Thomas said that inflation worries won't derail prospects of grain exports as there were ample stocks, and that a ministerial panel may consider allowing wheat and rice exports on Sept. 6.
"We are open to allowing 1.0 million tons of parboiled rice as well as 1.0 million tons of ordinary rice," Thomas said. He added that permission for export of small quantities of premium rice as well as 2.0 million tons of wheat may also be considered.
In July, the government permitted shipments of common-grade rice for the first time in three years after setting a minimum export price of $400/ton and imposing a cap of 12,500 tons for each applicant, but the exports got locked up in a legal dispute over rules.
Libyan Food Stuck In Ports
Millions of dollars worth of food destined for Libya has been stuck in ports for weeks as trade sanctions and cash flow problems have left transport systems paralyzed, trade and shipping sources said Friday.
Even as Western diplomats announced moves to release frozen assets to Libya's new government and help restore the country after months of violence, dealers said tens of thousands of tons of supplies contracted from Turkish and Egyptian companies remain stranded in European and Libyan ports.
"There is product sitting in pretty much every container terminal in Europe," a trader with a major international soft commodities merchant said.
Another estimated the total embargoed goods could be worth $200 million, although this could not be confirmed.
In Tripoli's port, where humanitarian agencies warn that thousands of people are going hungry due to a lack of food supplies, 12 vessels containing an estimated 60,000 metric tons of bagged Turkish wheatflour have been waiting for the past six weeks to unload, according to a port source.
In the nearby port of Al Khoms, two containers holding an estimated $7 million-worth of rice contracted by Libya's state food buyer, the Price Stabilization Fund, have been held since July, two people familiar with the matter said. A further container of rice is also waiting in the Italian port of Gia Tauro, along with 20,000 tons of white sugar worth more than $18 million, also contracted by the PSF, two other people with knowledge of the matter said.
Some dealers said the disruptions have been caused by shipping lines not wanting to brave the danger of the ports or break European and North Atlantic Treaty Organization sanctions. Others blamed issues with payments caused by the freezing of Libyan assets in banks across Europe and North Africa, which have sapped the PSF of funds.
"The West made it so hard for us to get paid that the movement of food has come to a standstill," a dealer involved with the shipments said. "Now many companies are saying it's unsafe to work with Libya."
As Libya imports 90% of its food the disruption is a serious issue.
In Tripoli--where Gadhafi forces were overrun in fierce battles more than a week ago--supplies of food, fuel and water are running dangerously low.
Abber Etefa, spokeswoman for the United Nation's World Food Program, said the body has been "acting to avert a crisis" across in the country. Guma El-Gamaty, the U.K.-based coordinator and spokesman for the National Transition Council, said hundreds of thousands of tons of aid are being unloaded at ports from Turkey and elsewhere "as we speak".
Yet the private sector has also played a key role in keeping the country afloat. International merchants like France's Soufflet and Glencore International PLC (GLEN.LN) are already moving to supply wheat, according to traders, and a person at industry association the Russian Grain Union said 50,000 tons of Russian wheat had made its way to Libya in July through Egyptian and Tunisian traders.
"We shipped this cargo in the worst period of Libya's conflict because we knew people in Libya were in a very bad situation," said one of the traders involved in the shipments. "Traders are now scared of selling foods to Libya and this will remain until NTC gives financial confidence to the market."
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