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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$). < 2005 – 2006 actual growth 10% - 10.9% >. Source: China National Statistics Bureau - PowerPoint PPT Presentation
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U.S. WHEAT
the world’s reliable choice
CHINA – MARKET BRIEFING
U.S. Wheat AssociatesCHINA
FEBRUARY 2008
China – Population: 1.3 billion
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,0007,5008,0008,5009,0009,500
GDP
China Economy: Fastest Growing Major Economy
(2007 growth 11.5% - 11.9%)
(Billion US$)
< 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
020406080
100120140160180200220
87/88 89/90 91/92 93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08
MM
T XX
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
80/8181
/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
Hec
tare
s
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
HenanShandongHebeiAnhuiJiangsuAverage
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
etric
Ton
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
etric
Ton
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
etric
Ton
XX
PNW to Japan US Gulf to Middle East (Egypt)St. Lawrence to Europe/Rotterdam Great Lakes to Italy
U.S. WHEAT
the world’s reliable choice
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
the world’s reliable choice
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
498915
2003/04 2005/06 2007/08
1,000's of metric tons
SW/WWNS/DNSSRWHRW
*(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
IndonesiaMalaysiaPhilippinesKorea (S)VietnamOthers
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)
IndonesiaMalaysiaPhilippinesKorea (S)VietnamOthers
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 outletsJanuary 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