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China's stocks-to-use ratio to reduce in 2015/16: USDA
16 Jun '15
2 min read
Lower imports and production and marginally higher consumption in China are expected to reduce China’s stocks-to-use ratio in 2015/16.
According to a USDA press release, China’s stocks-to-use ratio in 2015/16 is expected to slip to around 170 per cent, down from 190 per cent in 2014/15.
“Although these are record high stock levels, China’s stock-accumulation policy is not entirely unprecedented,” the US agricultural agency said.
“Similar rapid stock run-ups occurred from 1982/83 to 1984/85 as well as from 1993/94 until 1998/99,” USDA added by saying.
In previous cases, high stocks-to-use have usually been reduced by approximately 20 percentage points per year, similar to current 2015/16 forecasts for China.
Slightly lower 2015/16 stocks-to-use ratios are forecast for most major markets outside of China, both importers and exporters.
“During previous periods of volatility in Chinese stocks-to-use, stocks-to-use in the rest of the world (ROW) have tended to stay near their historic norms,” it informed.
“Any correlation between China and ROW stocks has been fairly muted as this trend is expected to continue in the current period,” the agency explained.
India’s stocks-to-use are forecast to decline from 48 to 43 per cent, while most other large markets are expected to see declines under 5 percentage points.
Bangladesh and Southeast Asia stocks-to-use, on the other hand, are projected to remain roughly even or rise slightly.
For 2015/16, USDA has raised marginally production, use, and trade, while ending stocks are lowered.
The US season-average farm price is projected at 60 cents/pound, with the mid-point slightly lower than the current season estimate.
For 2014/15, world production and ending stocks also have been reduced, while world trade has been raised on somewhat higher expected Chinese imports and use has been hiked slightly.
The agency further informed that forecasts for US production and exports for 2014/15 remain unchanged, but forecast for the US season-average farm price has been increased to 60.5 cents/pound. (AR)
According to a USDA press release, China’s stocks-to-use ratio in 2015/16 is expected to slip to around 170 per cent, down from 190 per cent in 2014/15.
“Although these are record high stock levels, China’s stock-accumulation policy is not entirely unprecedented,” the US agricultural agency said.
“Similar rapid stock run-ups occurred from 1982/83 to 1984/85 as well as from 1993/94 until 1998/99,” USDA added by saying.
In previous cases, high stocks-to-use have usually been reduced by approximately 20 percentage points per year, similar to current 2015/16 forecasts for China.
Slightly lower 2015/16 stocks-to-use ratios are forecast for most major markets outside of China, both importers and exporters.
“During previous periods of volatility in Chinese stocks-to-use, stocks-to-use in the rest of the world (ROW) have tended to stay near their historic norms,” it informed.
“Any correlation between China and ROW stocks has been fairly muted as this trend is expected to continue in the current period,” the agency explained.
India’s stocks-to-use are forecast to decline from 48 to 43 per cent, while most other large markets are expected to see declines under 5 percentage points.
Bangladesh and Southeast Asia stocks-to-use, on the other hand, are projected to remain roughly even or rise slightly.
For 2015/16, USDA has raised marginally production, use, and trade, while ending stocks are lowered.
The US season-average farm price is projected at 60 cents/pound, with the mid-point slightly lower than the current season estimate.
For 2014/15, world production and ending stocks also have been reduced, while world trade has been raised on somewhat higher expected Chinese imports and use has been hiked slightly.
The agency further informed that forecasts for US production and exports for 2014/15 remain unchanged, but forecast for the US season-average farm price has been increased to 60.5 cents/pound. (AR)
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