Satellites aid China crop estimatesThe use of satellite data has helped hone estimates of China’s crop production, but the global market still lacks reliable numbers on the country’s grain stocks, the U.S. Department of Agriculture’s chief economist says.
By: Gus Trompiz, Reuters
The use of satellite data has helped hone estimates of China’s crop production, but the global market still lacks reliable numbers on the country’s grain stocks, the U.S. Department of Agriculture’s chief economist says.
“While there’s been some progress in trying to estimate production and indicators on where there might be production problems, of course this has very little (bearing) for any of the other variables like consumption or inventory levels,” economist Joseph Glauber, says regarding satellite data.
“The Chinese have been very good about their participation in AMIS (Agricultural Market Information System), but we’re still hopeful they will start providing better data on inventory levels,” he says.
AMIS was launched by the Group of 20 leading economies to promote transparency and curb the kind of volatility seen in grain markets in the past decade.
The accuracy of China’s data has become a major issue for traders and analysts as surging food demand has made it one of the world’s largest importers of grains. USDA’s top analyst of world crop statistics last month called on China to improve transparency.
To help China in its grain forecasting, USDA is working with some Chinese officials similar to the collaboration it has had with other countries, Glauber says.
France, the European Union’s largest grain producer and exporter, last month also said it would reinforce cooperation with China on statistics as part of support for AMIS.
US corn feed survey
USDA, meanwhile, is facing calls to improve its own data-collection system for animal-feed use of corn in the U.S., which has been transformed in recent years by the rise of ethanol byproducts such as distillers dried grains (DDGs).
Glauber reiterates that USDA is looking into whether to introduce a corn feed use survey, as called for by a study earlier this year.
But he says fast-changing patterns in feed use in response to varying prices of feed grains made this hard to measure.
“To do that effectively, you’d have to hit effectively not only commercial use, but also on-farm use, and you’d probably have to do that more often than every quarter, so you’re talking about a big investment,” he says.
As previously announced, USDA is preparing to revive some industrial reports that used to be handled by the Commerce Department, which would shed light on wheat milling, soybean processing and ethanol production, he says.
Regarding China’s rejection of U.S. corn shipments containing a nonapproved genetically modified strain, Glauber says this should be a short-term problem, given China’s massive import requirements.
Traders say China has stopped issuing import permits for U.S. DDGs, following previous rejections of corn cargoes.
Glauber says he did not have any information about DDG imports or China’s ongoing regulatory process to approve Syngenta’s MIR 162 corn at the center of the trade dispute.
“Over the longer run, we expect China to be the world’s largest corn importer,” he says. “I don’t think those longer term structural needs are going to be affected by what right now is a setback for U.S. exporters of DDGs and corn.”