Crop trade deficit recorded for 1st time
By Zhao Huanxin (China Daily)
Updated: 2004-08-20 00:26

China logged a staggering agriculture trade deficit in the first half of this year, importing US$3.73 billion more than it exported, indicated the latest statistics from the Ministry of Agriculture.

Ministry officials and academics, however, gave a lukewarm response to the scenario, claiming the situation is a result of the country's ever-opening market, and may not become a trend.

"It is still too early to conclude the agriculture trade deficit will run for the whole or the coming years," Wang Zhanlu, a division director of the ministry's Agriculture Trade Promotion Centre, told China Daily Thursday.

The agriculture trade is subject to an array of factors, including supply-demand relations, prices, harvests and even climate, he said.

But the status quo probably means China may not be able to sustain a long-standing agriculture trade surplus as it always did before it joined the World Trade Organization (WTO) in 2001, said Han Yijun, a researcher with the ministry's Research Centre for Rural Economy.

The country averaged an agriculture trade surplus of US$4.3 billion a year between 1995 and 2003, according to the centre's data.

In the first half of 2004, the country exported US$10.62 billion of farm produce, up by 10.7 per cent over the same period last year, according to a statement from the ministry.

Imports, however, soared by 62.5 per cent year on year to hit a record US$14.35 billion, producing a US$3.73 billion deficit, compared with a surplus of US$760 million in the first half of last year, said the statement.

"The deficit is glaring but not surprising, given the country's commitments following WTO entry, the implementation of tariff rate quotas and competition in the global market," Han said, without specifying.

Compared with the first half of last year, China imported 1.8 times as much as grain (rice, corn, wheat and barley), or 4.115 million tons, in the first half of this year, partly in response to the straining supply-demand relations in the domestic market, according to Han.

In particular, wheat trade made a U-turn during the period, Han said.

Back in the first half of last year, China was a net exporter of wheat. But it imported 2.727 million tons of wheat by the end of this June, the latest customs statistics indicated.

Wang of the Agriculture Trade Promotion Centre said grain imports constituted just a marginal part of food consumption in China, and the country will by no means rely on imports for food security.

Wheat imports, for example, have been used to replenish stocks rather than for direct consumption, according to Han Jun, a senior researcher with the State Council Development Research Centre - a leading government think-tank.

Cheng Guoqiang, another researcher with the State Council think-tank, also said the agriculture trade deficit, largely a result of a drastic increase in imports of grain, edible oil and cotton, is mostly within the rational range.

What Cheng reckoned as "unexpected" was the part of the deficit contributed to by trade in animal products.

China's animal products have been long regarded as advantageous in terms of export, Cheng said.

But between January and June, China exported US$1.37 billion worth of animal products and imported US$2 billion, creating a deficit of US$630 million, the customs statistics indicated.

With the bird flu epidemic that occurred earlier this year, the ever-growing technical barriers imposed on Chinese agricultural products have set back and upset Chinese exports, Cheng said improving hygiene and quality standards in animal products will be key to trade expansion.

Major importers

China imported most agricultural products from North America in the January-June period. Sales of agricultural products to China increased by 78.4 per cent year-on-year to hit US$5.65 billion.

The United States alone exported US$4.96 billion worth of farm produce to China, a jump of 68.1 per cent compared with the same period in 2003, according to customs statistics.

China's agricultural exports to the US were valued at US$1.12 billion, up by 26.9 per cent in the half year period.

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