Chinese demand for extra feed to grow, on rising GDP

29.11.2016

Chinese agriculture will be unable to accommodate fresh demand, so imports will continue to rise, said Agrimoney economist John Phelan at the AgriRisk Forum.

As the Chinese economic growth sputters, it is still rising faster than the population, so "the GDP per head will rise, albeit at a slower rate," Mr Phelan said.

"This increase in income will mean that more Chinese people will shift their diet from grains to protein," he said.

'Extra feed needed'

Chinese demand for meat products will continue to rise, and so will the demand for the feed to produce them.

The amount of extra feed needed to produce China's beef, veal, pork, and chicken if it closes its 'consumption gap' with Taiwan, would be 128m tonnes, just over the total Chinese wheat production for 2013, Mr Phelan said.

"To close the gap by half by 2025 would require 64m tonnes of feed, more than the total US wheat production in 2013," he said.

Soybean demand rises

Despite its size, Chinese agricultural resources are limited and the country is increasingly turning to imports to meets its needs.

Currently, soybeans dominate Chinese imports.

"If China, the world's top soybean importer, increases soybean production as much as it hopes to, this will hit farmers in the top producers, Brazil, US and Argentina," Mr Phelan said.

The three countries have helped soybean production nearly double over the last 15 years.

However, Mr Phelan believes there will be no downward pressure on soybean prices.

"Given the vast appetite in China for soybeans and the looming shortfalls in domestic supply, even if production targets are met, this will not exert a great downward pressure on world prices," he said.


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