Agricultural production will continue to be under import pressure this year

Affected by the growth of domestic demand, the expansion of internal and external price differences and the fluctuation trough of the international market, China's agricultural imports continued to grow at a high level in 2014. In terms of specific products, grain imports increased significantly, oilseed vegetable oil imports remained stable on the whole, cotton and sugar imports decreased but remained high, beef and mutton imports increased slightly, milk powder imports increased significantly, and superior export products grew rapidly as a whole. In 2015, under the influence of many factors, such as the growth of domestic demand, the downward price of loose supply in the international market and the drive of price difference, the development of agricultural industry is facing great import pressure.

Domestic demand and the widening of internal and external price differences promote the high growth of imports

The domestic demand for feed grain is growing, which has become the main driving force for the substantial growth of grain imports. With the population growth and the change of food consumption structure in China, the demand for livestock and poultry products such as meat, eggs and milk is increasing, and the demand for feed grain is exuberant. Soybean meal after soybean pressing and rapeseed meal after rapeseed pressing are important raw materials of feed products. China's imported barley and sorghum are traditionally mainly used for wine-making, and the total import volume is stable at about 3 million tons. As corn imports were controlled in 2014, imports of barley and sorghum as substitutes soared, with an increase of 7.78 million tons over the same period last year mainly for feed grain. In addition, imports of corn distiller's grains (DDGs), as corn products, increased significantly.

Loose supply and low prices in the international market are the main driving force for large imports of agricultural products. In recent years, the consumption demand of grain, cotton and other staple agricultural products is relatively stable, coupled with the good production situation in the international market, supply and demand is relatively loose. In 2014, the global grain inventory-consumption ratio was as high as 25.5%, and the global cotton inventory-consumption ratio remained above 90%. International agricultural prices are in the doldrums, falling to their lowest level since 2010, pushing a large number of agricultural commodities into the domestic market, resulting in a large backlog of inventories. In the context of enhanced internal and external price linkages of agricultural products and limited space for domestic policy support, ensuring domestic industrial security and farmers' livelihoods are faced with major challenges.

China's border protection measures are limited, and the persistent existence of internal and external price differences is an important driving force for the import of agricultural products. The import of agricultural products in China lacks effective border protection measures. take grain as an example, the tariff within the quota of the three staple grains is only 1%, and the tariff on barley and sorghum is only 3% and 2%. The after-tax price of imported grain is still lower than the domestic price, and the import power of enterprises is strong. From a domestic point of view, driven by cost growth in recent years, domestic prices continue to rise, and the internal and external price gap continues to expand. From January to December 2014, the average price difference between China and Thailand was 818 yuan / ton, the average internal and external price difference of corn was 646 yuan / ton, and the average internal and external price difference of wheat was 434 yuan / ton. Although there is reasonable demand for grain imports in 2014, such as variety adjustment and domestic shortages, a considerable part of grain imports are driven by price differentials, and the problem of insufficient storage capacity caused by excessive imports is highlighted, thus ensuring moderate grain imports are facing challenges.

The "floor effect" of grain production and the "ceiling effect" of import prices are increasing.

The global economy is slowly recovering. In recent years, the outlook for the global economy has been uncertain and the recovery has been weak. Developed economies have been dragged down by historical problems (including debt overhang, high unemployment, etc.) and low potential growth rates. The potential growth rate of emerging economies is 1.5% lower than in 2011, and the downside risks are obvious. According to the International Monetary Fund's World Economic Outlook in October 2014, the 2014 economic growth forecast has been lowered to 3.3% due to weaker-than-expected global economic activity in the first half of 2014. The global growth forecast for 2015 was lowered to 3.8%, and the growth rate of developed economies was 2.3%, including the United States to 3.1% from 2.2% in 2014, the euro area from 0.8% to 1.3%, and Japan from 0.9% to 0.8%. The growth rate of emerging economies increased from 4.4% to 5.0%. Overall, the process of global economic recovery is still slow.

There is ample supply and low prices in the international market. The global supply of agricultural commodities is abundant, production expectations are optimistic, coupled with relatively stable consumer demand, adequate stocks, and a loose relationship between supply and demand. According to the forecasts of the United Nations Food and Agriculture Organization and other agencies, grain production in 2014 will be 2.532 billion tons, an increase of 7 million tons, consumption of 2.465 billion tons, ending inventory of 628 million tons, inventory consumption of 25.5% of Prida. The International Cotton Advisory Committee (ICAC) forecasts global cotton production of 26.082 million tons in 2014-15, with an inventory-to-consumption ratio of 87.1%. Supply and demand fundamentals are difficult to support agricultural prices, which have been low for a long time and have fallen to their lowest level since 2010 in 2014.

The moderate import of agricultural products is facing challenges. On the one hand, import growth plays a positive role in increasing domestic supply, on the other hand, it also has a negative impact on the industry. From the perspective of import factors, the high growth of imports is not only a reasonable reason for demand-driven, but also the problem of excessive imports. For a period of time to come, the cost of agricultural production in China will rise rapidly, and the "floor effect" of grain production and the "ceiling effect" of import prices will continue to strengthen. Under the circumstances of low agricultural tariff level and limited space for policy support, agricultural production continues to bear import pressure. To protect and make good use of the existing policy space, effectively strengthen domestic support in agriculture, effectively strengthen import regulation and control, and ensure the safety of domestic industries is a major challenge for China's agriculture under the condition of opening up.