Outlook for some of China’s major crops in 2018

Publish time:12/18/2017 12:00:00 AM      Source: CCM
Information collection and data processing:  CCM     For more information, please contact us

At the end of 2017, China’s grain farmers look back at a year of severe growing rice overcapacity, easing corn overcapacity, and huge wheat reserves. In 2018, rice farmers will face fierce competition, while corn producers can hope for recovering prices and wheat farmers see the minimum purchase price cut.


CCM analyses the market situation of all three major crops in China and gives an outlook for the development in 2018. 

If you are interested in detailed market research on China’s crop market, have a look at CCM’s monthly Crop Farming China News newsletter, covering all relevant premium information on China’s crop market, including market trends, company dynamics, policy changes, and much more newsworthy stories. 

China hybrid rice market

China’s farmers have produced almost the same amount of hybrid rice in 2017 as it was the case in 2016. While the yield per hectare went down slightly the area of farming has been increased, which balanced out the loss significantly. The main reasons for the smaller yield per hectare outcome can be found in flood occurrences of China’s major rice planting area Hunan and the unexpected appearance of devastating diseases especially targeting the three-line late rice. Especially the occurrences of blast, false smut, sheath blight, bacterial diseases, plant hoppers, leaf rollers, and borers have damaged the crop during the middle and late growth stage.

However, the yield disappointment of some farmers does not change the fact, that China will continue to suffer from severe hybrid rice overcapacity in 2018, which is estimated to be around 120 million kg. The number comes from a hybrid rice seed supply of about 380 million kg facing a significant lower combination of domestic demand and export by 260 million kg, according to market intelligence firm CCM.


As a result, it is to expect in China that hybrid rice will face a fierce competition and lower prices to gain some market share. 

What’s more, the planting area of conventional rice has grown to more than 121 thousand ha in 2017, strengthening the tendency that conventional rice seeds are to take over the market of hybrid rice in China.

China hybrid corn market

As opposed to the hybrid rice seeds market situation in China, hybrid corn seeds have witnessed a significant drop in 2017, leading to a release of the overcapacity of hybrid corn seeds in the coming year.

According to CCM’s research, the planting area of hybrid corn decreased by more than one quarter, which leaves the actual planting area to the scale of about 15 years ago. The output fell alongside the smaller planting area. The downsize measurements are part of the corn planting structure reform promoted by the Chinese government to ease the high pressure from the high inventories established in previous years.


Furthermore, besides the decrease in planting area, another reason of the corn seed output decrease in north-western regions of China were scorching weathers, diseases and pests. Extensive and long-lasting scorching weathers during the pollinating period and diseases and pests such as aphids, mites, and corn rust during the late pollinating period have affected corn bearing and grouting.

New corn seed varieties are gaining attention in the middle kingdom, promoted for use in food and feed, while most of the inventory corn is facing bad quality and hence sold for non-agricultural use like energy and fuel processing.

The price of corn in China stopped falling amid the reduced supply. With an estimated corn demand of about 1.1 billion kg in 2018, CCM predicts that China’s corn seed market is about to recover and corn seed prices will increase again. 

China’s wheat market

China has recently announced to cut its minimum price for purchasing wheat in 2018, aiming to ease the pressure on the huge reserves the country has built over the last decades. The minimum price will drop by about 2.5% for the new year. 

The minimum purchase price for wheat ensures a steady income and security for farmers, as the state buys the wheat when the market price falls below the stated level. Th future of this program is uncertain, looking at the fact that China already abandoned similar programs for cotton and corn I order to adjust better to world market trade.

However, even China has declined the minimum purchase prices of wheat, farmers are still active in planting, so wheat areas won't be greatly affected in 2018, according to CCM.

Affected by tight wheat supply and the approaching Spring Festival in China, bran prices recorded some rises, but poor-quality flour prices continued falling. It is predicted that due to rising operating rate and weak demand, their prices will both see fluctuations.

About CCM

CCM is China’s market intelligence provider for the fields of Agriculture, Chemicals, and Food & Feed.

For more information on China’s Crops market, please have a look at our website to find all services and products we provide for your business growth in China or contact us directly by econtact@cnchemicals.com

People who read this article also read what the article