china – market briefing
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FEBRUARY 2008. CHINA – MARKET BRIEFING. U.S. Wheat Associates CHINA. China – Population: 1.3 billion. China Economy: Fastest Growing Major Economy ( 2007 growth 11.5% - 11.9%). (Billion US$). < 2005 – 2006 actual growth 10% - 10.9% >. Source: China National Statistics Bureau - PowerPoint PPT PresentationTRANSCRIPT
U.S. WHEAT
the world’s reliable choice
CHINA –
MARKET BRIEFING
U.S. Wheat AssociatesCHINA
FEBRUARY 2008
China – Population: 1.3 billion
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,0007,5008,0008,5009,0009,500
GDP
China Economy: Fastest Growing Major Economy
(2007 growth 11.5% - 11.9%)
(Billion US$)
< 2005 – 2006 actual growth 10% - 10.9% >
Source: China National Statistics BureauExchange rate @7.6 (2007), growth rate 2008-2010 @8.5%, 2011-2020 @7%
High Per Capita GDP Growth
(Unit: US$)
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,000
Per Capita GDP
Source: China National Statistics BureauExchange rate @7.6 (2007), growth rate 2008-2010 @8.5%, 2011-2020 @7%
China – Wheat area: PRC 23.5 MHa / USA 23.4 MHa
•Dalian
•Xiamen
•Shenzhen
•Zhanjiang
•Lianyungang
•Huangpu
•Fangcheng
•Qinhaungdao
•Xingang
•Nantong•Zhangjiagang •Shangh
ai•Ningbo
China - 15 MAJOR PORTS
•Yantiai
•Qingdao
China Wheat Situation
106
0
39
101
0
20
40
60
80
100
120
140
79/80 83/84 87/88 91/92 95/96 99/00 03/04 07/08
MM
T
Production Imports Ending Stocks Utilization
11491 83
114 112
71
45
4581
92
39
39
0
20
40
60
80
100
120
140
160
180
200
220
87/88 89/90 91/92 93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08
MM
T X
X
rest of world China
China accounted for 49% of world stocks in 1999/2000, down to 29%
Chinese vs. Rest of the World Ending Stocks
China’s Soybean Supply / Demand
15
34
48
30
10
20
30
40
50
60
77/78 82/83 87/88 92/93 97/98 02/03 07/08
MM
T
Production Imports Ending Stocks Utilization
China’s Rice Supply / Demand
127
1128
33
0
20
40
60
80
100
120
140
160
77/78 82/83 87/88 92/93 97/98 02/03 07/08
MM
T
Production Imports Ending Stocks Utilization
China’s Corn Supply / Demand
143
148
26
20
20
40
60
80
100
120
140
160
77/78 82/83 87/88 92/93 97/98 02/03 07/08
MM
T
Production Ending Stocks Exports Utilization
China –Wheat Area and Production
0
20
40
60
80
100
120
140
80/8
181
/8282
/8383
/8484
/8585
/8686
/8787
/8888
/8989
/9090
/9191
/9292
/9393
/9494
/9595
/9696
/9797
/9898
/9999
/0000
/0101
/0202
/0303
/0404
/0505
/0606
/0707
/08
MM
T &
Mill
ion
He
cta
res
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
MT
/Ha
Area Harvested (Millions HA) Production (MMT) Yield/Ha
23.0
107
4.6
China Wheat Production - Major Producer Provinces
(Unit: MMT)
Source: China National Grain & Oil Information Center (CNGOIC)* Estimate
0
5
10
15
20
25
30
35
01/02 02/03 03/04 04/05 05/06 *06/07 *07/08
Henan
Shandong
Hebei
Anhui
Jiangsu
China Wheat Yield - By Major Province
(Unit: MT/Ha)
Source: China National Grain & Oil Information Center (CNGOIC)* Estimate
0
1
2
3
4
5
6
7
01/02 02/03 03/04 04/05 05/06 *06/07 *07/08
Henan
Shandong
Hebei
Anhui
Jiangsu
Average
China Daily Grain Market Price :
0
50
100
150
200
250
300
Ex-Warehouse Hebei Ex-Warehouse Shandong Ex-Warehouse Henan Ex-Rail Guangdong
Source: China National Grain & Oils Information Center Exchange rate @8.0 since Sep 2004, @7.86 since Nov 2006, @7.55 since Jul [email protected] since Aug 2007, @7.15 since Jan 2008
U.S. FOB PNW Prices
160
260
360
460
560
660
760
Feb-08Dec-07Oct-07Aug-07Jun-07Apr-07Mar-07
$/M
etri
c T
on
HRS 14% HRW 11.5% SW
100
150
200
250
300
350
400
450
500
550
600
Feb-08Oct-07Jun-07Mar-07Nov-06Jul-06Mar-06Dec-05Aug-05
$/M
etr
ic T
on
SW SRW
SRW and Soft White Prices
Ocean Freight Rates for Grains
20
40
60
80
100
120
140
160
Feb-08Dec-07Oct-07Aug-07Jun-07Apr-07Mar-07Jan-07
$/M
etri
c To
n
XX
PNW to Japan US Gulf to Middle East (Egypt)
St. Lawrence to Europe/Rotterdam Great Lakes to Italy
U.S. WHEAT
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China Wheat Imports - Calendar Year – by Country
(Unit: MMT)
Source: China Customs Statistics
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2003 2004 2005 2006 2007
Canada
U.S.A
Australia
French
Others
U.S. WHEAT
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China Flour Imports - Calendar Year – by Country
(Unit: TMT)
Source: China Customs Statistics
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2003 2004 2005 2006 2007
JapanNepalKorea (S)CanadaU.S.AAustraliaOthers
China’s US ImportsPurchases and actual imports: Containerized and bulk vessel shipments
498
915
2003/04 2005/06 2007/08
1,000's of metric tons
SW/WW
NS/DNS
SRW
HRW
*(July – June)
HRW – 0.5SW/WW-5.8NS/DNS-3.3SRW – 57.3
SW/WW-178NS/DNS-188SRW – 66
376152
HRW – 0.3SW/WW-10.5NS/DNS-0.7SRW – 0
516 725
U.S. WHEAT
the world’s reliable choice
China Wheat Exports - Calendar Year – by Country
(Unit: MMT)
Source: China Customs Statistics
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
2003 2004 2005 2006 2007
Indonesia
Malaysia
Philippines
Korea (S)
Vietnam
Others
U.S. WHEAT
the world’s reliable choice
China Wheat Exports - *Crop Year – by Country
(Unit: MMT)
Source: China Customs Statistics*Crop Year from June to next May
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
03/04 04/05 05/06 06/07 07/08(0706-0712)
Indonesia
Malaysia
Philippines
Korea (S)
Vietnam
Others
U.S. WHEAT
the world’s reliable choice
China Flour Exports - Calendar Year – by Country
(Unit: 10 TMT)
Source: China Customs Statistics
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2003 2004 2005 2006 2007
Korea (N)Hong KongIndonesiaPhilippinesKorea (S)ThailandOthers
U.S. WHEAT
the world’s reliable choice
China Flour Exports - *Marketing Year – by Country
(Unit: 10 TMT)
Source: China Customs Statistics*Marketing Year from July to next June
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
03/04 04/05 05/06 06/07 07/08(0707-0712)
Korea (N)Hong KongIndonesiaPhilippinesKorea (S)ThailandVietnamOthers
Noodle/Dumpling49%
Biscuit6%
Steam Bread40%
Western Bread/cake
5%
Noodle/Dumpling Steam Bread
Western Bread/cake Biscuit
China’s flour consumption estimates –
70 MMT
Market Quality Segments
High
Medium
Low
Medium
Low
Market
Pressure
CurrentCurrent FutureFuture
High
QSR Expansion (Quick Service Retail)
Western-Style Fast Food
Source: China Food Industry Association and internet
Quick Service Retail Chains
(QSR)
# of outlets
May 2004
# of outlets
January 2005# of outlets June 2007
Growth %
07 vs 05
KFC 1,000 1,400 1,800+ 28.5%
McDonald’s 560 663 815 14.6%
Pizza Hut 130 150 200+ 33.3%
Dico’s 300 400 54 - 640.7%
HRW & HWW Use – China( HWW - 12.5 or higher protein )
•Western Pan Bread (only pan loaf tested in OVA)
•Sweet Breads
•European Hearth Breads
•Dumpling (Jiao Zi) Wrappers
•Premium Grade Chilled and Fresh Noodles
Policies Affecting Wheat•Domestic & int’l price differential
•TRQ•Value added tax - VAT
•Milling wheat and flour exports•VAT, TRQ
•Flour exports to other Asian markets
•Animal & plant quarantine rules•Dockage and non-wheat seeds•TCK and KB fungus •Insects
•MRL’s for pesticides
•Food labeling requirements
US Wheat Activities•Trade servicing and information
•Weekly price report•Crop and harvest progress reports•Supply & demand reports•Industry & Government relations
•Publications•Chinese or dual language
•Sino – America Baking School•Instructor training (USA, Europe, Asia)
•Baking technical servicing•Milling technical servicing•Wheat procurement training•Overseas Varietal Analysis•Asian products collaborative
U.S. WHEAT
the world’s reliable choice
Questions / Answers