China wheat estimates '8.5m tonnes too high' 5th March 2010, by Agrimoney.com
Widely-used estimates of China's corn and wheat production may be a total of 13.5m tonnes too high thanks to data distortions encouraged by an internal subsidy regime, US officials have said.
US government attaches in Beijing have slashed their estimate of the 2009-10 wheat harvest in China, the world's biggest producing country, to 106m tonnes, highlighting instead the damage to yields caused by drought, disease and late rains.
The figure is 8.5m tonnes the equivalent of Argentina's wheat production - lower than the estimate in the US Department of Agriculture's benchmark global crop supply and demand report, which takes into account official Beijing data.
The department will release updated statistics on Wednesday.
The attaches' report also stood by an estimate of 150m tonnes for Chinese corn output last year, 5m tonnes shy of the current USDA figure.
'Tempted to overstate'
The discrepancies reflect a subsidy programme which pays provinces by reported production, the attaches said, restating a warning issued last year over the accuracy of official Chinese crop data.
Attache estimates for China's 2009-10 crops (change on official US data)
"To gain more allocation of financial aid from the central government, provincial government authorities are occasionally tempted to overstate their grain output in a given year even if the crop was impacted by adverse weather," the briefing said.
UK-based farm blogger Dave Norris said the alleged overestimates were "no huge surprise, let's face it.
"But it does put things into perspective when you consider that China are supposed to account for almost a third of the world's wheat stocks this year."
The attaches pegged China's wheat inventories at the end of 2009-10 at 52.3m tonnes, still showing an increase year on year, but 8.5m tonnes below the official USDA estimate.
Land squeeze
The report forecast rises in China's production of both corn and wheat for 2010-11, reflecting an assumption of a return to average yields for both crops.
Attache forecasts for China's 2010-11 crops (year-on-year change)
Wheat production: 112.0m tonnes (+5.7%)
Year-end wheat stocks: 60.6m tonnes (+15.9%)
Corn production: 163.0m tonnes (+8.7%)
Year-end corn stocks: 59.6m tonnes(+13.1%)
Comparisons with attache 09-10 estimates
Planting area of grains, including rice, is set to increase by 1%, "buoyed by government support but hindered by decreasing arable land in China", the attaches said.
Although China has cleared one variety of genetically modified corn for farm use, and two types of biotech rice, they are not expected to be planted on a commercial scale for at least two years.
