May 2015
Ag Insight

Ag Insight

China’s rice imports sets new record

Rice imports by China are expected to set a new record in 2015, surpassing 2014 levels by 200,000 metric tons and marking the fourth consecutive year of record imports. Rice imports surged in 2012 to more than 7 times the average of the previous 5 years, and continued to grow each year thereafter. China remains the world’s largest rice producer and consumer, and has been largely self-sufficient in rice for more than 30 years and, until recently, was typically a net rice exporter. In 2012, China surpassed Nigeria to become the world’s largest rice importer. Vietnam and Burma are the largest suppliers of rice to China, along with Pakistan and Thailand. The United States is currently unable to ship rice to China due to ongoing disagreements over phytosanitary issues. China’s record imports are not due to a short crop or tight supplies, but are the result of much lower prices for imported rice than for domestic rice, and continued growth in use partly due to an increasing population. As the world’s largest rice consumer, even small dietary shifts can have a large effect on the supplies needed to meet consumer demand and China is increasingly turning to the world market to feed its appetite not only for staple commodities such as rice but also fruits, vegetables, meat and other consumer-oriented products.

India’s imports of oilseeds on the rise

Production incentives for Indian oilseeds are being eroded by declining prices for imported vegetable oils, down to a 6-year low. Indian rapeseed area fell 7 percent in 2014/15 to 6.6 million hectares. Peanut production is down 4.6 million hectares (15 percent) from 2013/14, continuing a shift by Indian farmers to competing crops such as cotton. Similarly, sunflower seed area is down 13 percent in 2014/15. Cottonseed production is estimated to be nearly flat in 2014/15 and soybean production increased about 10 percent, reflecting an improved yield. Total oilseed production will be down about a half million metric tons from the previous year and 1.2 million metric tons from 2012/13. To make up for lower domestic production, India’s imports of vegetable oil are forecast to be up more than 10 percent in 2014/15, the fourth consecutive year of growth. This trend has turned India into the world’s top importing country for vegetable oil, and a major factor in determining global prices.

 

U.S. disposable income spending on decline for food at home

Between 1960 and 2007, the share of disposable personal income spent on total food by Americans fell from 17.5 to 9.6 percent, as the share of income spent on food at home fell. The share of income spent on food purchased in grocery stores and other retailers declined from 14.1 percent in 1960 to 5.5 percent in 2007. At the same time, the percent of income spent on food purchased at restaurants, fast-food places and other away-from-home eating places increased from 3.4 to 4.1 percent. The share of income spent on total food began to flatten in 2000, as inflation-adjusted incomes for many Americans have stagnated or fallen over the last decade or so. In addition, between 2006 and 2013, food-price inflation has been greater than overall inflation, making food more costly. In 2013, Americans spent 5.6 percent of their disposable personal incomes on food at home and 4.3 percent on food away from home. This chart appears in the ERS data product.

 

U.S. agricultural trade a surplus with China

In recent years, growth in United States-China agricultural trade has accelerated. During calendar years 2012-13, U.S. exports of agricultural products to China averaged $25.9 billion per year - a tenfold increase from the late 1990s. Sales to China doubled during 2004-08 and doubled again during 2008-12, while the share of U.S. agricultural exports going to China rose from about 3 percent during the 1990s to 18 percent during 2012-13. China became the largest overseas market for U.S. farm products in 2010. U.S. imports of agricultural products from China rose at a slower pace, reaching $4.4 billion in 2013 - agriculture is one of the few sectors where the United States has a trade surplus with China. During 2012-13, the United States accounted for over 24 percent of China’s agricultural imports by value and was its leading supplier of oilseeds, cotton, meat, cereal grains, cattle hides, distillers’ dried grains (mainly used for animal feed) and hay. Soybeans account for more than half of the total value of U.S. agricultural exports to China, averaging $14.1 billion during the 2012-13 calendar years, and are also the largest U.S. export of any type to China, accounting for about 11 percent of the value of total U.S. exports to China.