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China's new production estimates

14 Dec 2018

China has revised its grain production estimates. This is not an unusual move, neither for China nor for any other country. The revisions emanated from the 2017 census, the results of which have recently been released by the National Bureau of Statistics. Unusual, however, is the extent of the revisions and the fact that they go all the way back to the last census, which took place in 2007. It is also unusual that all revisions go only in one direction: upwards. In every single year since 2007, grain production is now higher than hitherto reported.

Cumulatively, the upward revisions for maize alone amount to 266 million tonnes (see chart). For all cereals combined, the upward revisions add up to 312 million tonnes, which corresponds to about the level of annual production of the entire European Union. The sheer magnitude of this adjustment confronts market analysts with the challenge of how to accommodate the cumulative production increase in China’s grain balances, and more specifically, how to distribute the extra grain over the various forms of utilization (i.e.  food, feed, seed, industrial use, stocks and waste).

While the census results have put the spotlight on China’s grain estimates, many other AMIS countries need to improve the utilization side of their balances as well. The long-term solution can lie in more and better survey-based estimates, especially of stocks. More immediate improvements would include ensuring that feed estimates are in line with herd sizes and composition as well as feeding intensities and efficiencies. In addition, the amount of grains and oilseeds allocated to industrial use could be reviewed and juxtaposed to industrial output such as biofuels, paints or detergents. Finally, the amounts allocated to waste can be compared with estimated levels of disappearance, ensuring that the resulting ratios remain within intuitive and corroborative ranges.

The AMIS Secretariat will continue working with participants to implement some of these proposed improvements. These will help make better assessments of the global supply and demand situation of the AMIS crops and enhance overall market transparency.