FOOD SECURITY OVERVIEW

• 2020 wheat production forecast near average

• Forecast cereal import requirements in 2019/20 below average

• Rice and wheat prices have remained broadly stable since early 2020

• The African swine fever outbreak severely affected the swine industry in 2018 and 2019

2020 wheat production forecast near average

The main winter wheat harvest for 2020 is underway and finished at the end of June, while the spring wheat harvest will take place in July and August. Since the start of the crop year in September, rainfall amounts and irrigation water availability have been near average in most of the major production areas. In northern parts of the country, snow cover during the winter months was sufficient to protect crops from winter damage and increased soil moisture during the critical spring months. Localized damage to standing wheat crops was reported in Henan and Hubei provinces, due to below-average rains in April and a cold snap in late spring. Wheat production for 2020 is provisionally estimated at 134 million tonnes, close to the average level.

The 2020 early double rice harvest has just started, while the late single and double crops, to be harvested between September and November, are currently being planted. Overall, the area seeded is expected to stabilize, following the contractions recorded in 2018 and 2019, as the government approved, for the first time in six years, an increase in government purchase prices for Indica rice.

Planting of the 2020 maize was completed in April in the south and will continue until the end of June in the north, where most of the production is concentrated. The area sown is estimated to be close to the five-year average, mainly thanks to government support measures. Overall, production prospects are favorable as weather conditions were near average and supported crop development in the main production areas. According to official information, some concerns remain due to the potential widespread impact of fall armyworm (FAW) infestations.

Forecast cereal import requirements in 2019/20 below average

Total cereal import requirements for MY 2019/20 are expected to reach 18.8 million tonnes, about 20 percent below the five-year average.

Rice imports for calendar year 2020 are forecast to reach 2.6 million tonnes, about 33 percent below the level of the previous year, due to the large availability of the 2019 paddy harvest and large stocks. of postponement. Wheat imports in MY 2019/20 (July / June) are forecast to reach 3.5 million tonnes, close to the five-year average, due to large domestic supplies from large stocks. Among coarse grain imports in MY 2019/20 (October / September), maize imports are forecast to be 3.5 million tonnes, slightly above the five-year average, reflecting a strong demand from the animal feed industry. In contrast, barley and sorghum imports are forecast to reach 5.5 and 2.5 million tonnes, about 20 percent and 40 percent, respectively, below the five-year average. The expected sharp drop in barley and sorghum imports reflects their replacement by maize for animal feed.

Rice and wheat prices have remained broadly stable since early 2020

Prices for Indica and Japonica rice were generally stable from January to April 2020 and declined slightly in May, reflecting adequate market availability. Overall, rice prices in May were below their levels a year earlier.

Wheat and wheat flour prices have been generally stable since the start of the year, mainly due to large supplies from the bumper 2019 production and favorable expectations for the 2020 wheat harvest.

The African swine fever outbreak severely affected the swine industry in 2018 and 2019

The country, which is the world’s largest producer and consumer of pork, was severely affected by several outbreaks of African swine fever (ASF) in 2018 and 2019. In an effort to contain the spread of the disease, the ministry of Agriculture and the Ministry of Rural Affairs reported that about 1.2 million pigs had been slaughtered since the outbreak began in August 2018. Animal losses due to ASF have resulted in a substantial reduction in pigs. farmer incomes, raising concerns about the livelihoods activities and food security of millions of people depend on pig farming. Small-scale pig farmers, who depend on pork production for their own consumption as well as to generate income, are among the most affected as they typically lack the expertise and / or financial resources to protect their herds. of disease. . Around 130 million households in the country are engaged in pig farming and about 30 percent of the national pig production is produced by small producers.

COVID-19 and measures adopted by the government

In an attempt to prevent the spread of the COVID-19 pandemic, the government has adopted several measures, including large-scale mobility restrictions nationwide, social distancing and the closure of educational institutions. From mid-February 2020, the government gradually removed restrictions on mobility and activity, prioritizing key sectors and industries that are important to the national economy. As of the end of May 2020, social distancing remains in place in parts of the country, with local and international travel remaining limited.

In May 2020, the government announced the implementation of several packages to support the national economy. These include a CNY 4.2 trillion ($ 594 billion) support program for:

• Prevention and control of epidemics, including the production of medical equipment.

• Payment of unemployment insurance, also to migrant workers.

• Tax relief and exemption from social security contributions.

The People’s Bank of China has provided monetary support of CNY 1.8 trillion (US $ 255 billion) at low interest rates to micro, small and medium enterprises producing essential goods and services for daily necessities and to the agricultural sector.

The government has also taken measures to provide financial assistance to households, businesses and regions affected by difficulty in repaying their loans. The main measures include:

• Encouragement of loans to small and medium-sized enterprises (SMEs), including loans to SMEs unsecured by local banks.

• The delay in loan repayments, the maturity being extended until the end of March 2021, and the easing of loan size restrictions for online lending and other credit support measures for SMEs and households eligible.

• Encouraging the lending of higher Non-Performing Loans (NPLs) and reducing the requirement to cover provisions for NPL.