Commodities: China's Food Games Continue (1996)
williamsinference.com
Demand
When people rise above the subsistence level, the first thing they want is to
eat a little better. Chinese are beginning to eat more meat, fish and eggs.
About 1.2 billion Chinese are moving up the food chain at the same time.
To put this in perspective, the Chinese government wants each resident to
receive one more egg every four days. "The extra chickens required to
achieve this goal will annually consume the equivalent of the entire grain
crop of Australia," states Worth.
Over the last five years Chinese consumption of pork has grown by 11
million metric tons, an increase more than the entire annual U.S. pork
production. The Chinese, nearly five times the U.S. population, now eat
four times as much pork as Americans. Consumption of poultry which
requires three pounds of feed per pound of bird has more than doubled.
Total meat consumption in China is growing 10 percent a year which is a
staggering four million tons annually. Hudson Institute's Center for Global
Food Issues estimates that to feed all its chickens and pigs, China's feed
grain consumption over the past four years has climbed by over 50 million
tons--the biggest surge in world history.
What do the Chinese drink with their chicken, pork and beef? In hundreds
of millions of households, the answer is beer. This year, China will import
1.5 million tons of malting barley for beer.
Supply
China ranks among nations with the smallest amount of grainland per
person. To make matters worse, farmland is disappearing at the rate of 5.6
percent in the last four years. The major factor contributing to such loss is
the conversion of cropland to nonfarm use. Farmland is replaced by
shopping centers, roads, golf courses and private villas. In rapidly
industrializing Guangdong province, for example, some 40 golf courses have
been built in the newly affluent Pearl River Delta region alone.
Less farmland in China and a new diet have drained world grain stocks to
the lowest level in 20 years. In such an environment, China's reluctance to
buy wheat and fertilizer must be a posturing game.
Chickens
In China, the average person now eats just two chickens a year. As living
standards rise in China, so does the consumption of chicken. Raising
chickens for the table--or rather, giving local farmers the wherewithal to do
so--is a business with big potential. CP Pokphand sells day-old chicks and
chicken feed to China from its agri-business division. |
