Geneva-based SG SA in their survey for Bloomsberg, checked with production in the seven major corn producing provinces in China.
On-hand inventory is at a nine-year high. This higher new inventory is good news for Chinese users as imports from the USA are predicted to be 64 per cent less for China this crop year.
On November 15th, 2012, the national average corn price was 2.24 RMB/kg ($0.359 USD/kg), the national average wheat bran price was 1.80RMB/kg ($0.288 USD/ kg) and the national average soybean meal price was 4.14 RMB/kg ($.663 USD/kg). National average feed costs were 3.14 RMB/kg ($0.503 USD/kg).
China's Consumer Price Index (CPI) continues to be quite interesting for the National Government. The CPI is made up of 30.49 per cent food found in the consumers' basket.
Pork is estimated to be about 1/3 of the food portion of the basket or in other words, about 8 to 10 per cent of CPI as a whole. Thus, with these calculations in mind, the price of pork in the entire CPI weighs between 2.5 per cent to 3 per cent. This level is much larger than the world's major pork producing and consuming countries, such as Japan (0.66 per cent factor), United States (0.34 per cent factor) and in Germany (0.71 per cent factor) on CPI.
Currently, inflation is around 1.6 per cent for October as compared to August at 2.0 per cent and September at 1.8 per cent (with October being the lowest level-33 month low since February, 2010). This is a drop from the high of 6.5 per cent in July, 2011 (37 month high).
Analysts expect that the years' average CPI will decline to 3.3 per cent from 5.4 per cent in 2011. (For the first 9 months of 2012, inflation has averaged 2.84 per cent). This is lower than the 4 per cent set by the National Government. This may give more space for the government ministries to readjust macro-economic policy.
For the 4th quarter, Dr. Wang Yu Wen, from the Bank Financial Research Centre, suggests that the CPI year-on-year will be about 2.3 per cent higher than the recently completed third quarter and for next year having a CPI that could be 3.5 per cent.
