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Commodity Intelligence Report
August 25, 2016

China: 2016/17 Summer Crop Outlook

China’s main summer crops include rice, corn, soybeans, peanuts, and cotton. The planting window is typically March through May, and the crops are now at various stages of development ranging from advanced vegetative to physiological maturity. Crop conditions over the main growing regions, as indicated by satellite-derived vegetative indices, have generally been favorable across the country. Early in the season, average to above-average rainfall resulted in favorable conditions for planting and early plant growth. In the Yellow River basin (Hebei, Shandong, and Jiangsu), precipitation for during April and early May was generally normal. Some parts of the North China Plain, however, reported below-average rainfall and the potential for crop stress.
In southern China, satellite imagery indicates that conditions for early, intermediate, and late rice are favorable due to beneficial temperatures and sufficient rainfall. Continuous heavy rain could adversely affect the flowering of early rice and the growth of semi-late rice but no negative impacts have yet been reported. Early rice is at the booting to heading stage while semi-late rice is at the tillering stage. Rice production is forecast at 146.5 million metric tons, up 0.5 percent from last year, and corn production is forecast at 218.0 million metric tons, down 2.9 percent from last year.
Oilseed production for 2016/17 is forecast to increase from 2015/16. Soybean production is forecast at 12.2 million metric tons, up 5.0 percent from last year; peanuts at 16.9 million metric tons, up 2.4 percent, and sunflowerseed at 2.5 million tons, up 0.4 percent. Rapeseed production is forecast to decrease, with output estimated at 13.3 million metric tons, down 7.0 percent from last year, and cottonseed production is forecast at 8.43 million metric tons, down 4.4 percent from last year.
Cotton production is forecast to decrease for 2016/17, continuing a decline that began in 2012/13. Output is forecast at 21.5 million bales (480-pound bales) or 4.68 million metric tons, down 4.4 percent from last year. The major factors shaping the decline in production are continued farmers’ responses to changes in agricultural policy. Faced with high stockpiles of cotton over the last 5 years, the government reduced cotton subsidies. The changes to cotton subsidies and other government support have resulted in lower profits and a subsequent reduction in planted area. This, in turn, has resulted in a significant shift from cotton to other crops that offer higher returns, including rice. Since the introduction of new cotton policies in 2014 the overall trend for cotton farming continues to decline, with the trend occurring at a more rapid pace in eastern China than in Xinjiang province. In the Huan-Huai River basin and Yangtze River basin the total area is projected to decline by approximately 34 percent from last year, relative to a 6 percent area decline in Xinjiang province.
The harvest of winter wheat, meanwhile, is complete. Winter wheat accounts for 95 percent of China’s total wheat production. Overall conditions during the winter wheat season were about average. Strong rains in April and May in many key wheat producing regions (Anhui, Henan, Hebei, and Jiangsu) during the grain-fill stage, and heavy rains in June during harvest reduced wheat quality throughout the region, increasing the share of lower quality feed-grade wheat. Lower quality notwithstanding, China’s 2016/17 wheat production is forecast at 130.0 million metric tons, nearly matching last year’s record 130.2 million tons.



Current USDA area and production estimates for grains and other agricultural commodities are available on IPAD's Agricultural Production page or at PSD Online.

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For more information contact Dath Mita | | (202) 720-7339
USDA-FAS, Office of Global Analysis

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