Black Sea Grains Conferencebsg.blackseagrainconference.com/en/2013/presentations/prs...Black Sea...

Black Sea Grains Conference

April 17-18, 2013

Kiev, Ukraine By

Guo Jia Hua

Dongling Grain & Oil Co., Ltd [email protected]

www.dongling.cn

mailto:[email protected]

China Soybean & Grains Market Projected Deficit for 2013-2015

& Market Outlook

I) Geographical and Economic Briefing

II) Overview of Current Markets

III) Likely Supply Deficit in Years Ahead

IV) China Soybean & Corn Supply-Demand

V) Summary of Market Outlook

Source: China Statistical Yearbook




Ⅳ) China Soybean & Corn Supply-Demand



* Oilseeds Market

* Meat Production

* Feed Industry

* Crushing Industry

* Import Needs for Oilseeds & Edible Oils

China Oilseeds Distribution

Soybean in China

Rapeseed in China

Groundnut in China

Cotton in China


* Oilseeds Market

* Meat Production

* Feed Industry

* Crushing Industry


Meat Production by Type


62% of Meat Production Being Distributed

Along the Coastal Regions

Component Changes of Meat Production

in China



* Oilseeds Market

* Meat Production

* Feed Industry * Crushing Industry


Continual Growth of Feed Production

in China

Source: China Feed Industry Association

Continual Growth of Feed Production

in China

Feed production in China 2011

Source: China Feed Industry Association

72% of Feed Production Capacity Being

Distributed Along Coastal Regions


* Oilseeds Market

* Meat Production

* Feed Industry

* Crushing Industry * Import Needs for Oilseeds & Edible Oils

75% of Crushing Capacity is located along

Coastal Regions

Top 13 Crushers Account for 62% of National

Crushing Capacity

Source: Own Estimate

Production Capacity Along Coastal Regions Meat = 62% Feed = 72% Crushing = 75%


* Oilseeds Market

* Meat Production

* Feed Industry

* Crushing Industry

* Import Needs for Oilseeds & Corn

Robust Growth of Soybean Meal

Consumption

Source: USDA

Stagnant Production of Domestic Soybean

Source: USDA

Widening Soybean Deficit

Source: USDA

Explosive Import of soybean resulting

from Big Deficit

Source: USDA

Robust Growth of Domestic Consumption

of Vegetable Oil

Stagnant Production of Domestic

Oilseeds

Widening Deficit of Domestic Supply

of Edible Oils

Explosive Import of oilseeds and Oils

resulting from Big Deficit

Continual Growth of Domestic Corn Consumption

Source: USDA

Can China Corn Production Maintain Sufficient Growth ??

Source: USDA

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

0

5

10

15

20

25

30

35

40

07/08 08/09 09/10 10/11 11/12 12/13

Official Corn Planting Area - Too Optimistic / Too High

Planting Area % Growth

mln HA

Source: CNGOIC

Expected Flattening Growth of Corn

Production

-10

-5

0

5

10

15

20

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

China Corn – Trending to be net Importer




Ⅳ) China Soybean & Corn Supply-Demand


Projected Meat & Feed Production

Source: China Feed Industry Association ,China Statistical Yearbook

1、Higher Meat Consumption Due to

Increase of Population Size

2、Higher Meat Consumption Due to

Higher Urbanization Rate

Grains & Meats Consumption Per Capita – Farms Vs City

3、Higher Meat Consumption Due to Higher GDP Per Capita

Source: USDA

4、National Policy - in favor of Grains Production instead of Oilseeds

Projected Domestic Soybean Deficit

Source: USDA &Own Estimate

Projected Domestic Soybean Import


0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

09/10 10/11 11/12 12/13(E) 13/14(P) 14/15 (P)

China - Expected Higher Corn Consumption

Feed Usage Industry Usage Food Usage Seeding & Residues

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

0

5

10

15

20

25

30

35

40

07/08 08/09 09/10 10/11 11/12 12/13

Official Corn Planting Area - Too Optimistic / Too High

Planting Area % Growth

mln HA

Source: CNGOIC

Corn Self-sufficiency – Hard to be Continued!!


Projected Domestic Corn Deficit


China - Corn Import to Become Regular Activity




III) Possible Deficit Scenario in Years Ahead

Ⅳ) China Soybean & Corn S-D


China Soybean S-D

Source: USDA & Own Estimate

(000 MT for Prod etc)

(000 HA for Area)

China Corn S-D

Source: USDA & Own Estimate

1、China’s Oilseeds Supply

2、China’s Edible Oils Supply

3、China’s Edible Oils Consumption

4、China Incremental Supply & Demand

Summary of Market Outlook * Smaller import volume (Vs USDA) of soybean for 2012/2013 was

due to logistic problems in Brazil; * Soybean stock for both Commercial and Government Reserve were

drawn down by delay arrival of Brazil soybean and this is expected to induce record import soybean volume for 2013/2014;

* Higher canola seed import was due to by strong protein demand and relatively tight SBM supply;

* Corn import to China is becoming a regular activity and volume will be picked up gradually in years ahead;

* Expected import volume to China for 2012/2013: Soybean - 59 mln tons; Canola Seed - 3.0 mln tons; Soybean Oil - 1.3 mln tons; Rapeseed Oil - 0.6 mln tons; Palm Olein - 6.0 mln tons;

• Recent negative margin in Hog and Poultry sectors will limit growth of SBM demand for LH of 2013 but current high live hog # in farms will maintain strong demand for SBM;

• Price of edible oils will continue to be on defensive in months ahead, particularly SBO because of above normal stock level and cheap PO;

• Current above normal px spread of SBO/PO will induce more application of PO in blended edible oils & for industrial uses;

• Expected strong meal / weak oil scenario to be continued in months ahead;

43

44

45

46

47

48

49

50

51

52

410

420

430

440

450

460

470

480

Mln Heads Mln Heads

High Sow # in Farms Ensure Strong Demad for SBM

Hog in Farms Sow in Farms

-100

400

900

1400

1900

2400

3000

4000

5000

6000

7000

8000

9000

10000

11000

20

09

.07

.20

20

09

.08

.11

20

09

.09

.08

20

09

.10

.12

20

09

.11

.06

20

09

.12

.04

20

10

.01

.04

20

10

.02

.01

20

10

.03

.08

20

10

.04

.05

20

10

.05

.04

20

10

.06

.02

20

10

.07

.06

20

10

.08

.05

20

10

.09

.02

20

10

.10

.09

20

10

.11

.05

20

10

.12

.03

20

10

.12

.31

20

11

.01

.31

20

11

.03

.08

20

11

.04

.07

20

11

.05

.06

20

11

.06

.29

20

11

.07

.28

20

11

.08

.25

20

11

.09

.23

20

11

.10

.28

20

11

.11

.25

20

11

.12

.23

20

12

.02

.09

20

12

.03

.08

20

12

.04

.11

20

12

.05

.10

20

12

.06

.07

20

12

.07

.06

20

12

.08

.03

20

12

.08

.31

20

12

.09

.28

20

12

.11

.02

20

12

.11

.30

20

12

.12

.28

20

13

.01

.30

20

13

.03

.04

Local Ex-warehouse CDSBO and Local Ex-warehouse Palm Oil Price

spread2 Local Ex-warehouse CDSBO

当地豆油价格

Local Ex-warehouse Palm Oil

本地棕榈油报价

Swing Factors • Macro-factor: Euro Debt Crisis Development / US$; • Timing of local hog farms to reduce Sow # in responsive to

current negative margin; • Logistic problems in Brazil / possible strikes in Argentine /

possible soybean demand Swift to US origin in months ahead; • Government Policy: * Subsidizing policy over Starch export; * Continued restriction over use of Corn by local Ethanol

Plants? * Possible release of soybean from Stock Reserve in 3rd Qtr; * Degree of loosening Monetary Policy in 2013;

Reference Information / Import Data

0

1

2

3

4

5

6

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Corn Import to China to become Regular Activity in Years Ahead

0

500

1000

1500

2000

2500

3000

3500

2007 2008 2009 2010 2011 2012

000tons China - Canola Seed Import

0

500

1000

1500

2000

2500

3000

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

000tons China - Soybean Oil Import

0

1000

2000

3000

4000

5000

6000

7000

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

000tons China - Palm Oil Import

0

500

1000

1500

2000

2500

3000

3500

2007 2008 2009 2010 2011 2012

000tons China - Rapeseed Oil Import

0

20

40

60

80

100

120

140

160

180

2009 2010 2011 2012

000tons China – Sunflower Seed Oil Import

China – 2013 Import Quota

Commodity Stated-Owned Non State-Owned Total

K tons % K tons % K tons %

Corn 4,320 60% 2,880 40% 7,200 100%

Wheat 8,672 90% 964 10% 9,636 100%

Rice 2,660 50% 2,660 50% 5,320 100%

Cotton 295 33% 599 67% 894 100%

-100

100

300

500

700

900

1100

1300

1500

3000

4000

5000

6000

7000

8000

9000

10000

11000

12000

20

09

.07

.20

20

09

.08

.11

20

09

.09

.08

20

09

.10

.12

20

09

.11

.06

20

09

.12

.04

20

10

.01

.04

20

10

.02

.01

20

10

.03

.08

20

10

.04

.05

20

10

.05

.04

20

10

.06

.02

20

10

.07

.06

20

10

.08

.05

20

10

.09

.02

20

10

.10

.09

20

10

.11

.05

20

10

.12

.03

20

10

.12

.31

20

11

.01

.31

20

11

.03

.08

20

11

.04

.07

20

11

.05

.06

20

11

.06

.29

20

11

.07

.28

20

11

.08

.25

20

11

.09

.23

20

11

.10

.28

20

11

.11

.25

20

11

.12

.23

20

12

.02

.09

20

12

.03

.08

20

12

.04

.11

20

12

.05

.10

20

12

.06

.07

20

12

.07

.06

20

12

.08

.03

20

12

.08

.31

20

12

.09

.28

20

12

.11

.02

20

12

.11

.30

20

12

.12

.28

20

13

.01

.30

20

13

.03

.04

Argentina Imported CDSBO and Local EX-warehouse CDSBO

spread 价差 Argentina Imported CDSBO

阿根廷豆油进口成本

Local Ex-warehouse CDSBO

当地豆油价格

-100

100

300

500

700

900

1100

1300

1500

3000

4000

5000

6000

7000

8000

9000

10000

11000

12000

20

09

.07

.20

20

09

.08

.11

20

09

.09

.08

20

09

.10

.12

20

09

.11

.06

20

09

.12

.04

20

10

.01

.04

20

10

.02

.01

20

10

.03

.08

20

10

.04

.05

20

10

.05

.04

20

10

.06

.02

20

10

.07

.06

20

10

.08

.05

20

10

.09

.02

20

10

.10

.09

20

10

.11

.05

20

10

.12

.03

20

10

.12

.31

20

11

.01

.31

20

11

.03

.08

20

11

.04

.07

20

11

.05

.06

20

11

.06

.29

20

11

.07

.28

20

11

.08

.25

20

11

.09

.23

20

11

.10

.28

20

11

.11

.25

20

11

.12

.23

20

12

.02

.09

20

12

.03

.08

20

12

.04

.11

20

12

.05

.10

20

12

.06

.07

20

12

.07

.06

20

12

.08

.03

20

12

.08

.31

20

12

.09

.28

20

12

.11

.02

20

12

.11

.30

20

12

.12

.28

20

13

.01

.30

20

13

.03

.04

Malay Imported Palm Oil and Local EX-warehouse Palm Oil

spread Malay Imported Palm Oil

马来西亚进口棕榈油成本

Local Ex-warehouse Palm Oil

本地棕榈油报价

Thank You

Dongling Grain & Oil Co., Ltd

[email protected]

www.dongling.cn

mailto:[email protected]

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