1. Prospects for Food Demand in China
Zhangyue Zhou, James Cook University
Weiming Tian, China Agricultural University
Jimin Wang, Chinese Academy of Agricultural Sciences
Hongbo Liu, James Cook University
Lijuan Cao, Nanjing Agricultural University
Session: Global Food Markets 2050
ABARES Outlook 2012 Conference
6-7 March 2012, Canberra

3. Outline of the presentation
1. Food consumption trends in China
2. China’s food import needs by 2020
3. Concluding comments

4. 1. Food consumption trends in China
• Increase in consumer income in the past
three decades has led to
– a decrease in the consumption of foodgrains
but
– an increase in the consumption of foods of
higher value, e.g., animal foods.

5. Per capita income in China (1980=100)
4000
3000
Per capita income, ¥
2000
1000
0
1980
1985
1990
1995
2000
2005
2010
Rural Urban

6. Per capita consumption of foodgrains
300 Per capita consumption of foodg rains in China
Per capita consumption, kg
250
200
150
100
50
0
1978 1980 1985 1990 1995 2000 2005 2010 1982 1985 1990 1995 2000 2005 2010
Rural Urban
Foodgrains
Rural: unprocessed; urban processed.

7. Per capita consumption of animal
products (1)
30 Per capita consumption of meats and poultry meats in China
Per capita consumption, kg
25
20
15
10
5
0
1978 1980 1985 1990 1995 2000 2005 2010 1982 1985 1990 1995 2000 2005 2010
Rural Urban
Meats Poultry meats
Meats include pork, beef and mutton.

8. Per capita consumption of animal
products (2)
25 Per capita consumption of poultry eggs, aquatic products and dairy products in
Per capita consumption, kg
China
20
15
10
5
0
1978 1980 1985 1990 1995 2000 2005 2010 1982 1985 1990 1995 2000 2005 2010
Rural Urban
Poultry eggs Aquatic products Dairy products

9. • Rural consumption of animal foods falls
significantly behind urban; largely due to
low rural income.
• Large consumption gaps also exist
between low-income and high-income
residents.

10. Income differences in 2010
50000
40000
Per capita income, ¥
30000
20000
10000
0
1st Q 2nd Q 3rd Q 4th Q 5th Q
Rural Urban
Q = quintile

11. Per capita consumption of pork by
income group
25 Per capita consumption of pork in China
20
Per capita consumption, kg
15
10
5
0
02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10
Rural Urban
1st Q 2nd Q 3rd Q 4th Q 5th Q
SSB data: underestimates, not including AFHC.

12. Per capita consumption of beef and
mutton by income group
5 Per capita consumption of beef and mutton in China
4
Per capita consumption, kg
3
2
1
0
02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10
Rural Urban
1st Q 2nd Q 3rd Q 4th Q 5th Q

13. Per capita consumption of beef and mutton
by income group in urban China
4 Per capita consumption of beef and mutton in urban China
Per capita consumption, kg
3
2
1
0
00 01 02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10
Beef Mutton
1st Q 2nd Q 3rd Q 4th Q 5th Q

14. Per capita consumption of poultry meats
by income group
8 Per capita consumption of poultry meats in China
Per capita consumption, kg
6
4
2
0
02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10
Rural Urban
1st Q 2nd Q 3rd Q 4th Q 5th Q

15. Per capita consumption of poultry eggs
by income group
15 Per capita consumption of poultry eggs in China
12
Per capita consumption, kg
9
6
3
0
02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10
Rural Urban
1st Q 2nd Q 3rd Q 4th Q 5th Q

16. Per capita consumption of dairy
products by income group
40 Per capita consumption of dairy products in China
30
Per capita consumption, kg
20
10
0
02 03 04 05 06 07 08 09 10 00 01 02 03 04 05 06 07 08 09 10
Rural Urban
1st Q 2nd Q 3rd Q 4th Q 5th Q

17. Per capita consumption of dairy products by
income group in urban China
30 Per capita consumption of dairy products in urban China
25
Per capita consumption, kg
20
15
10
5
0
0001020304050607080910 0001020304050607080910 0001020304050607080910
Fresh milk Milk powder Yoghurt
1st Q 2nd Q 3rd Q 4th Q 5th Q

18. Per capita consumption of aquatic
products by income group
15 Per capita consumption of aquatic products in China
12
Per capita consumption, kg
9
6
3
0
02 03 04 05 06 07 08 09 10 02 03 04 05 06 07 08 09 10
Rural Urban
1st Q 2nd Q 3rd Q 4th Q 5th Q

19. Per capita consumption of alcoholic drinks
by income group in urban China
8 Per capita consumption of alcohol drinks in urban China
Per capita consumption, kg
6
4
2
0
0001020304050607080910 0001020304050607080910 0001020304050607080910
Chinese liquor Beer Wine
1st Q 2nd Q 3rd Q 4th Q 5th Q

20. Per capita consumption of fruits by
income group
60 Per capita consumption of fruits in China
50
Per capita consumption, kg
40
30
20
10
0
03 04 05 06 07 08 09 10 02 03 04 05 06 07 08 09 10
Rural Urban
1st Q 2nd Q 3rd Q 4th Q 5th Q

21. • Rural food consumption is about 30 years
behind urban.
• There are large gaps in consumption
between the rich and poor.
• Per capita consumption of several foods of
higher value by top-income rural residents
is below, or even significantly below, that by
bottom-income urban residents, e.g., beef,
mutton, poultry eggs, dairy products, and
fruits.

22. • Further increase in food consumption in
China
– when rural residents’ income further improves; and
– when the income of low-income consumers increases.
• Attracting interests in projecting China’s
food consumption for at least three
important reasons:
– China’s own concerns;
– Exporters’ desire to tap into the Chinese market; and
– Impacts on world food supply and price levels.

23. 2. China’s food import needs by 2020
Projection differences: soybean production,
consumption and import needs in 2020
120 Soybean
104
100 88 88
million tonnes
80 73
57
60
38
40
17 15 19
20
0
USDA FAPRI Chen (2004)
Production Consumption Net Import
USDA and FAPRI projections are subject to annual modifications.

24. Sources of predictions
• USDA: Agricultural Projections
• FAPRI: World Agricultural Outlook
• OECD-FAO: Agricultural Outlook
• Our own judgments (O.J.)

25. million tonnes
-40
0
40
80
120
160
Wheat
Production
Consumption
2010
114.50 107.80
Actural (USDA)
Net Imports
-6.70
Production
Consumption
114.31 112.65
USDA
Net Imports
-1.66
Wheat
Production
Consumption
114.64 109.03
FAPRI
2020 Net Imports
-5.62
Production
Consumption
115.70 114.18
OECD-FAO
Net Imports
Net Import
O.J.
-1.52 2.00

26. Milled rice
Milled rice
160 136.30 135.66
136.00 135.00
125.83 125.86
120
million tonnes
80
40
-1.00 -0.65 0.03 0.00
0
Consumption
Consumption
Consumption
Production
Production
Production
Net Import
Net Imports
Net Imports
Net Imports
-40
Actural (USDA) USDA OECD-FAO O.J.
2010 2020

27. million tonnes
-50
0
50
100
150
200
250
Maize
Production
Consumption
2010
168.00 162.00
Actural (USDA)
Net Imports
-6.00
Production
198.83
Consumption
USDA
210.38
Net Imports
11.55
Maize
Production
Consumption
201.80 203.94
FAPRI
2020
Net Imports
2.15
Production
Consumption
210.31 213.61
OECD-FAO
Net Imports
3.30
Net Import
O.J.
5.00

28. million tonnes
0
1
2
3
4
5
6
7
Barley
Production
2.40
Consumption
4.60
2010
Actural (USDA)
Net Imports 2.20
Production
3.09
Consumption
USDA Net Imports
6.07 Barley
2.99
Production
2.93
2020
Consumption
5.62
FAPRI
Net Imports
2.69
Net Import
O.J.
2.00

29. million tonnes
0
20
40
60
80
100
Production 120
14.40
Soybean
Consumption
2010
68.85
Actural (USDA)
Net Imports
54.45
Production
16.65
Consumption
USDA
104.42
Net Imports
87.77
Soybean
2020 Production
15.00
Consumption
88.08
FAPRI
Net Imports
73.09
Net Import
O.J.
70.00

30. Sugar
25 23.07 Sugar
20 17.89
million tonnes
15
10
5.19
5 3.00
0
Production Consumption Net Imports Net Import
OECD-FAO O.J.
2020

31. million tonnes
-20
0
20
40
60
80
Pork
Production
Consumption
2010
50.00 50.05
Actural (USDA)
Net Imports
0.05
Production
Consumption
61.39 61.40
USDA
Net Imports
0.01
Pork
Production
Consumption
65.78 66.24
FAPRI
2020 Net Imports
0.46
Production
Consumption
61.48 61.20
OECD-FAO
Net Imports
-0.28
Net Import
O.J.
1.00

32. million tonnes
-2
0
2
4
6
8
Beef
Production
5.55
Consumption
5.53
2010
Actural (USDA)
Net Imports
-0.02
Production
6.56
Consumption
6.54
USDA
Net Imports
-0.02
Beef
Production
7.08
Consumption
7.36
FAPRI
2020 Net Imports
0.29
Production
7.18
Consumption
7.18
OECD-FAO
Net Imports
0.00
Net Import
O.J.
0.50

33. Mutton
Mutton
6
4.80 4.88
5
million tonnes
4
3
2
1 0.30
0.08
0
Production Consumption Net Imports Net Import
OECD-FAO O.J.
2020

34. million tonnes
-5
0
5
10
15
20
Production 25
Poultry
12.56
Consumption
2010
12.53
Actural (USDA)
Net Imports
-0.03
Production
16.47
Consumption
16.33
USDA
Poultry
Net Imports
-0.14
Production
2020
20.85
Consumption
20.92
OECD-FAO
Net Imports
0.07
Net Import
O.J.
0.50

35. Dairy products
60 Dairy products 59.06 56.97
47.29 47.45
50
40
million tonnes
30
20
10 2.00
0.16
0
Consumption
Consumption
Production
Production
Net Import
Net Imports
Net Imports
-10 -2.09
FAPRI OECD-FAO O.J.
2020
Dairy products: milk; measured in weight other than litre in China.
Imports: milk-equivalent dairy products, chiefly milk powder and whey.

36. Trade position of other products by 2020
Commodity Trade potential
Rapeseed Net import, around 2 mt
Vegetables Net export, 9-12 mt
Fruits Net export, 2-5 mt
Aquatic products Net import, around 2 mt
Eggs Largely self-sufficient

37. • In 2020, China’s net imports of foods are
unlikely very large.
• China’s 2020 net imports will be critically
affected by grain production subsidy.
• In the longer term, China’s food import
needs can be enormous, depending on the
rates of income growth, urbanisation, and
agricultural resource depletion, and the size
of grain production subsidy.

38. 3. Concluding comments
• SSB statistics: underestimates, missing
away-from-home consumption
• Food consumption growth potential: gap
between rural and urban and the rich and
poor
• Net imports: relatively small in the near
future; can be large in the longer term.

39. Thank you!

40. Drivers behind the trends
• Rising disposable income
• Rapid urbanisation
• Changing life style
• Availability of new cooking methods
• Changes in tastes and preferences
• Better organisation of food production and
marketing
• Changes in population structure.

41. Proportion of away from home
consumption of animal meats in China
Annual Consumption
At home Away Total
Quantity % of Quantity % of
(kg) total (kg) total
Pork 23.07 76 7.28 24 30.35
Beef 4.13 67 2.01 33 6.14
Lamb 2.43 70 1.05 30 3.48
Chicken 9.04 72 3.43 28 12.47
Other
poultry 1.84 42 2.50 58 4.33

42. Per Capita Annual Consumption of Animal
Products in China according to Different Sources
SSB (2010) Chen, Wang (2010) FAO (2007)
Rural Urban Average a Rural Urban Average Average
(kg) (kg) (kg) (kg) (kg) (kg) (kg)
Meat total 20.01 34.72 27.36 50.29 61.93 56.77 51.76
Of which: Pork 14.40 20.73 17.56 29.23 31.19 30.35 32.58
Beef 0.63 2.53 1.58 4.33 7.60 6.14 4.61
Lamb and mutton 0.80 1.25 1.02 2.15 4.56 3.48 2.83
Poultry 4.17 10.21 7.19 14.58 18.58 16.8 11.72
Poultry eggs 5.12 10.00 7.56 - - - 18.95
b
Aquatic products 5.15 14.30 9.72 - - - 35.56
Milk and dairy products 3.55 18.10 10.82 - - - 30.39

43. Per capita annual consumption
expenditure in China (1978-2010)
Value (Yuan) Share (%)
1978
1985
1990
1995
2000
2005
2010
1978
2000
2010
Item
Rural
Food total 79 183 344 768 821 1162 1801 67.7 49.2 41
Non‑ food
total 37 134 241 542 850 1393 2581 32.3 50.8 59
Total cons.
Exp. 116 317 585 1310 1670 2555 4382 100 100 100
Urban
Food total 311 673 694 1766 1958 2914 4805 57.5 39.2 35.7
Non‑ food
total 230 590 586 1772 3040 5028 8667 42.5 60.8 64.3
Total cons.
Exp. 541 1263 1280 3538 4998 7943 13471 100 100 100

44. Agricultural subsidies in China
Grains Seeds Machine Other Total
2002 0.1 0.1
2003 0.3 0.3
2004 11.6 2.9 0.1 0.0 14.5
2005 13.2 3.7 0.3 0.0 17.4
2006 14.2 4.2 0.6 12.5 31.5
2007 15.1 6.7 2.0 27.6 51.3
2008 15.1 12.1 4.0 71.6 103.0
2009 15.1 23.8 13.0 75.6 127.5
2010 15.1 20.4 14.5 83.5 133.5
2011 15.1 0.0 17.5 0.0 140.6