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Prospects for Food Demand in China_2012

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  • 1. Prospects for Food Demand in China Zhangyue Zhou, James Cook University Weiming Tian, China Agricultural University Jimin Wang, Chinese Academy of Agricultural Sciences Hongbo Liu, James Cook University Lijuan Cao, Nanjing Agricultural University Session: Global Food Markets 2050 ABARES Outlook 2012 Conference 6-7 March 2012, Canberra
  • 2. Outline of the presentation1. Food consumption trends in China2. China’s food import needs by 20203. Concluding comments
  • 3. 1. Food consumption trends in China• Increase in consumer income in the past three decades has led to – a decrease in the consumption of foodgrains but – an increase in the consumption of foods of higher value, e.g., animal foods.
  • 4. Per capita income in China (1980=100) 4000 3000 Per capita income, ¥ 2000 1000 0 1980 1985 1990 1995 2000 2005 2010 Rural Urban
  • 5. Per capita consumption of foodgrains 300 Per capita consumption of foodg rains in China Per capita consumption, kg 250 200 150 100 50 0 1978 1980 1985 1990 1995 2000 2005 2010 1982 1985 1990 1995 2000 2005 2010 Rural Urban FoodgrainsRural: unprocessed; urban processed.
  • 6. Per capita consumption of animalproducts (1) 30 Per capita consumption of meats and poultry meats in ChinaPer capita consumption, kg 25 20 15 10 5 0 1978 1980 1985 1990 1995 2000 2005 2010 1982 1985 1990 1995 2000 2005 2010 Rural Urban Meats Poultry meats Meats include pork, beef and mutton.
  • 7. Per capita consumption of animalproducts (2) 25 Per capita consumption of poultry eggs, aquatic products and dairy products in Per capita consumption, kg China 20 15 10 5 0 1978 1980 1985 1990 1995 2000 2005 2010 1982 1985 1990 1995 2000 2005 2010 Rural Urban Poultry eggs Aquatic products Dairy products
  • 8. • Rural consumption of animal foods falls significantly behind urban; largely due to low rural income.• Large consumption gaps also exist between low-income and high-income residents.
  • 9. Income differences in 2010 50000 40000 Per capita income, ¥ 30000 20000 10000 0 1st Q 2nd Q 3rd Q 4th Q 5th Q Rural Urban Q = quintile
  • 10. Per capita consumption of pork byincome group 25 Per capita consumption of pork in China 20Per capita consumption, kg 15 10 5 0 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10 Rural Urban 1st Q 2nd Q 3rd Q 4th Q 5th Q SSB data: underestimates, not including AFHC.
  • 11. Per capita consumption of beef andmutton by income group 5 Per capita consumption of beef and mutton in China 4 Per capita consumption, kg 3 2 1 0 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10 Rural Urban 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 12. Per capita consumption of beef and muttonby income group in urban China 4 Per capita consumption of beef and mutton in urban China Per capita consumption, kg 3 2 1 0 00 01 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10 Beef Mutton 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 13. Per capita consumption of poultry meatsby income group 8 Per capita consumption of poultry meats in ChinaPer capita consumption, kg 6 4 2 0 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10 Rural Urban 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 14. Per capita consumption of poultry eggsby income group 15 Per capita consumption of poultry eggs in China 12 Per capita consumption, kg 9 6 3 0 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10 Rural Urban 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 15. Per capita consumption of dairyproducts by income group 40 Per capita consumption of dairy products in China 30 Per capita consumption, kg 20 10 0 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10 Rural Urban 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 16. Per capita consumption of dairy products byincome group in urban China 30 Per capita consumption of dairy products in urban China 25 Per capita consumption, kg 20 15 10 5 0 0001020304050607080910 0001020304050607080910 0001020304050607080910 Fresh milk Milk powder Yoghurt 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 17. Per capita consumption of aquaticproducts by income group 15 Per capita consumption of aquatic products in China 12Per capita consumption, kg 9 6 3 0 02 03 04 05 06 07 08 09 10 02 03 04 05 06 07 08 09 10 Rural Urban 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 18. Per capita consumption of alcoholic drinksby income group in urban China 8 Per capita consumption of alcohol drinks in urban China Per capita consumption, kg 6 4 2 0 0001020304050607080910 0001020304050607080910 0001020304050607080910 Chinese liquor Beer Wine 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 19. Per capita consumption of fruits byincome group 60 Per capita consumption of fruits in China 50Per capita consumption, kg 40 30 20 10 0 03 04 05 06 07 08 09 10 02 03 04 05 06 07 08 09 10 Rural Urban 1st Q 2nd Q 3rd Q 4th Q 5th Q
  • 20. • Rural food consumption is about 30 years behind urban.• There are large gaps in consumption between the rich and poor.• Per capita consumption of several foods of higher value by top-income rural residents is below, or even significantly below, that by bottom-income urban residents, e.g., beef, mutton, poultry eggs, dairy products, and fruits.
  • 21. • Further increase in food consumption in China – when rural residents’ income further improves; and – when the income of low-income consumers increases.• Attracting interests in projecting China’s food consumption for at least three important reasons: – China’s own concerns; – Exporters’ desire to tap into the Chinese market; and – Impacts on world food supply and price levels.
  • 22. 2. China’s food import needs by 2020 Projection differences: soybean production, consumption and import needs in 2020 120 Soybean 104 100 88 88 million tonnes 80 73 57 60 38 40 17 15 19 20 0 USDA FAPRI Chen (2004) Production Consumption Net Import USDA and FAPRI projections are subject to annual modifications.
  • 23. Sources of predictions• USDA: Agricultural Projections• FAPRI: World Agricultural Outlook• OECD-FAO: Agricultural Outlook• Our own judgments (O.J.)
  • 24. million tonnes -40 0 40 80 120 160 Wheat Production Consumption2010 114.50 107.80 Actural (USDA) Net Imports -6.70 Production Consumption 114.31 112.65 USDA Net Imports -1.66 Wheat Production Consumption 114.64 109.03 FAPRI2020 Net Imports -5.62 Production Consumption 115.70 114.18 OECD-FAO Net Imports Net Import O.J. -1.52 2.00
  • 25. Milled rice Milled rice 160 136.30 135.66 136.00 135.00 125.83 125.86 120million tonnes 80 40 -1.00 -0.65 0.03 0.00 0 Consumption Consumption Consumption Production Production Production Net Import Net Imports Net Imports Net Imports -40 Actural (USDA) USDA OECD-FAO O.J. 2010 2020
  • 26. million tonnes -50 0 50 100 150 200 250 Maize Production Consumption2010 168.00 162.00 Actural (USDA) Net Imports -6.00 Production 198.83 Consumption USDA 210.38 Net Imports 11.55 Maize Production Consumption 201.80 203.94 FAPRI2020 Net Imports 2.15 Production Consumption 210.31 213.61 OECD-FAO Net Imports 3.30 Net Import O.J. 5.00
  • 27. million tonnes 0 1 2 3 4 5 6 7 Barley Production 2.40 Consumption 4.602010 Actural (USDA) Net Imports 2.20 Production 3.09 Consumption USDA Net Imports 6.07 Barley 2.99 Production 2.932020 Consumption 5.62 FAPRI Net Imports 2.69 Net Import O.J. 2.00
  • 28. million tonnes 0 20 40 60 80 100 Production 120 14.40 Soybean Consumption2010 68.85 Actural (USDA) Net Imports 54.45 Production 16.65 Consumption USDA 104.42 Net Imports 87.77 Soybean2020 Production 15.00 Consumption 88.08 FAPRI Net Imports 73.09 Net Import O.J. 70.00
  • 29. Sugar 25 23.07 Sugar 20 17.89million tonnes 15 10 5.19 5 3.00 0 Production Consumption Net Imports Net Import OECD-FAO O.J. 2020
  • 30. million tonnes -20 0 20 40 60 80 Pork Production Consumption2010 50.00 50.05 Actural (USDA) Net Imports 0.05 Production Consumption 61.39 61.40 USDA Net Imports 0.01 Pork Production Consumption 65.78 66.24 FAPRI2020 Net Imports 0.46 Production Consumption 61.48 61.20 OECD-FAO Net Imports -0.28 Net Import O.J. 1.00
  • 31. million tonnes -2 0 2 4 6 8 Beef Production 5.55 Consumption 5.532010 Actural (USDA) Net Imports -0.02 Production 6.56 Consumption 6.54 USDA Net Imports -0.02 Beef Production 7.08 Consumption 7.36 FAPRI2020 Net Imports 0.29 Production 7.18 Consumption 7.18 OECD-FAO Net Imports 0.00 Net Import O.J. 0.50
  • 32. Mutton Mutton 6 4.80 4.88 5million tonnes 4 3 2 1 0.30 0.08 0 Production Consumption Net Imports Net Import OECD-FAO O.J. 2020
  • 33. million tonnes -5 0 5 10 15 20 Production 25 Poultry 12.56 Consumption2010 12.53 Actural (USDA) Net Imports -0.03 Production 16.47 Consumption 16.33 USDA Poultry Net Imports -0.14 Production2020 20.85 Consumption 20.92 OECD-FAO Net Imports 0.07 Net Import O.J. 0.50
  • 34. Dairy products 60 Dairy products 59.06 56.97 47.29 47.45 50 40million tonnes 30 20 10 2.00 0.16 0 Consumption Consumption Production Production Net Import Net Imports Net Imports -10 -2.09 FAPRI OECD-FAO O.J. 2020Dairy products: milk; measured in weight other than litre in China.Imports: milk-equivalent dairy products, chiefly milk powder and whey.
  • 35. Trade position of other products by 2020 Commodity Trade potential Rapeseed Net import, around 2 mt Vegetables Net export, 9-12 mt Fruits Net export, 2-5 mt Aquatic products Net import, around 2 mt Eggs Largely self-sufficient
  • 36. • In 2020, China’s net imports of foods are unlikely very large.• China’s 2020 net imports will be critically affected by grain production subsidy.• In the longer term, China’s food import needs can be enormous, depending on the rates of income growth, urbanisation, and agricultural resource depletion, and the size of grain production subsidy.
  • 37. 3. Concluding comments• SSB statistics: underestimates, missing away-from-home consumption• Food consumption growth potential: gap between rural and urban and the rich and poor• Net imports: relatively small in the near future; can be large in the longer term.
  • 38. Thank you!
  • 39. Drivers behind the trends• Rising disposable income• Rapid urbanisation• Changing life style• Availability of new cooking methods• Changes in tastes and preferences• Better organisation of food production and marketing• Changes in population structure.
  • 40. Proportion of away from homeconsumption of animal meats in China Annual Consumption At home Away Total Quantity % of Quantity % of (kg) total (kg) total Pork 23.07 76 7.28 24 30.35 Beef 4.13 67 2.01 33 6.14 Lamb 2.43 70 1.05 30 3.48 Chicken 9.04 72 3.43 28 12.47 Other poultry 1.84 42 2.50 58 4.33
  • 41. Per Capita Annual Consumption of Animal Products in China according to Different Sources SSB (2010) Chen, Wang (2010) FAO (2007) Rural Urban Average a Rural Urban Average Average (kg) (kg) (kg) (kg) (kg) (kg) (kg)Meat total 20.01 34.72 27.36 50.29 61.93 56.77 51.76Of which: Pork 14.40 20.73 17.56 29.23 31.19 30.35 32.58 Beef 0.63 2.53 1.58 4.33 7.60 6.14 4.61 Lamb and mutton 0.80 1.25 1.02 2.15 4.56 3.48 2.83 Poultry 4.17 10.21 7.19 14.58 18.58 16.8 11.72Poultry eggs 5.12 10.00 7.56 - - - 18.95 bAquatic products 5.15 14.30 9.72 - - - 35.56Milk and dairy products 3.55 18.10 10.82 - - - 30.39
  • 42. Per capita annual consumption expenditure in China (1978-2010) Value (Yuan) Share (%) 1978 1985 1990 1995 2000 2005 2010 1978 2000 2010Item RuralFood total 79 183 344 768 821 1162 1801 67.7 49.2 41Non‑ foodtotal 37 134 241 542 850 1393 2581 32.3 50.8 59Total cons.Exp. 116 317 585 1310 1670 2555 4382 100 100 100 UrbanFood total 311 673 694 1766 1958 2914 4805 57.5 39.2 35.7Non‑ foodtotal 230 590 586 1772 3040 5028 8667 42.5 60.8 64.3Total cons.Exp. 541 1263 1280 3538 4998 7943 13471 100 100 100
  • 43. Agricultural subsidies in China Grains Seeds Machine Other Total 2002 0.1 0.1 2003 0.3 0.3 2004 11.6 2.9 0.1 0.0 14.5 2005 13.2 3.7 0.3 0.0 17.4 2006 14.2 4.2 0.6 12.5 31.5 2007 15.1 6.7 2.0 27.6 51.3 2008 15.1 12.1 4.0 71.6 103.0 2009 15.1 23.8 13.0 75.6 127.5 2010 15.1 20.4 14.5 83.5 133.5 2011 15.1 0.0 17.5 0.0 140.6