World Grain - June 2018 - 86
FEATURE: ASIA'S INSATIABLE APPETITE FOR GRAIN
for Thomson Reuters, stressed that "China's share of
protein consumption is unmatched, is still growing, and
is a matter of national security."
He said China's share of world crop consumption
continued to surge and its imports now dominated the
international trade of many commodities, including
soybeans, almonds, rice, barley and sorghum.
"China has a broad and growing reach," he added.
"China consumes half of the world's pork, a third of
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are needed to support these big industries. China's food
needs are unmatched and require global origination."
Emily French, managing director of ConsiliAgra,
said it was impossible to emphasize enough just how
important China now is as a food and agricultural market, and just what the U.S. agricultural industry could
be foregoing in the future if a trade war commences.
"By 2033, three quarters of Chinese households will
be considered middle class," she told delegates. "Food
and agricultural imports are projected to grow by 11%,
while presently the U.S. captures about 11% of total
food and agri import share."
China already accounts for 33% of the world's population with annual income in the range of $10,000 to
$100,000, over 200 million of its households have real
annual PPP incomes greater than $20,000, while a further 151 million households are projected to join this
group by 2026, French said.
Turning to the Belt and Road Initiative (BRI),
launched in 2013 by President Xi Jinping to bolster
trade and infrastructure links to Europe, the Middle
East and Central Asia, French said it now connected
China to 80 countries via its various components -
the Silk Road Economic Belt, the Maritime Silk Road
and the Arctic Silk Road. And it is still being extended,
not least to South America as BRI's role in ensuring
China's food security becomes clear.
"China has 20% of the world's population but only
7% of arable land so food security is a pillar of BRI and
Chinese policy," she added.
SOYBEAN DEMAND KEEPS GROWING
J.Y. Chow, senior vice-president for food and agri coverage at Mizuho Bank, said BRI was evident in China's
efforts to control supplies of soybeans from Brazil via
Cofco, its trading house, and also how it links China to
countries with high growth levels for feed use. Indeed,
although most speakers focused on where China would
in the future source its soybean requirements if a trade
Chow took a different line. He noted that China's imports of soybeans were set to top 100 million tonnes
this year even though domestic feed demand growth
"Feed demand growth started slowing from 2012, so
why does soy demand keep going up when feed dePDQGLVÀDW"´KHDVNHG$QVZHULQJKLVRZQTXHVWLRQ
he said there were multiple domestic reasons for this,
including better feed conversion rates and the industrialization of farming, but he also noted China's huge excess of crushing capacity. French added that currently
only 93 million to 94 million tonnes of capacity was in
use out of 150 million tonnes of capacity.
"China could potentially import more soybean and
export crushed soymeal to Southeast Asia while consuming soy oil instead of palm oil," Chow concluded.
With that possibility in mind, Chow told World
Grain on the sidelines of the conference that China's
imports of soybeans could potentially rise further in the
future, with meal then exported to Japan, South Korea,
Vietnam and the Philippines.
"All the crushing plants are on the coast so it's doable if they import at the right price," he explained.
June 2018 / World Grain / www.World-Grain.com