Chinese exports: H1 AJC, canned peaches, tomato paste and peanuts
China has ceased publishing its export data, for all its exported products, as part of its ongoing trade war with the US. China was one of the fastest countries in the world to report its Customs import/export data but has not published statistics since March this year.
Accordingly, IEG Vu has examined the historical data and added its own analysis of market and export trends to produce estimated figures for the missing three months (so far).
Chinese AJC exports have been much stronger this year than they were last (up by 47%), due to a good Chinese apple harvest, an abundance of relatively cheap raw material and an absence of serious competition from Poland. In the US market, Chinese AJC was also cheaper than Chilean or Argentinean.
However, for the months of May and June, IEG Vu has assumed that Chinese stocks were running relatively low and that the US had built up inventory while Europe had been buying on a spot basis, and so IEG Vu has assumed a lower average increase in April, May and June of 30%. This would give H1 exports of 359,235 tonnes (274,979 tonnes last year) tonnes and a seasonal (August-June) figure of 689,755 tonnes (484,794 tonnes).
Chinese canned peach exports declined by 10% in the first quarter of this year, and IEG Vu has extended this decline to cover Q2. This would bring H1 exports to 57,855 tonnes (64,184 tonnes last year).
The fall in Chinese exports is related to its reduced production this year, in turn caused by the frost that hit the country in April. However, there is a global over-supply and plenty of product available from sources such as Greece, though Russia, a key Chinese market, has been buying less due to the weakness of the rouble. China has also been selling its production at unrealistically low prices on the domestic market.
In the first half of 2017 China exported a total of 83,204 tonnes (in-shell and shelled combined) of peanuts to global destinations, 26.2% up from the January-June 2016 volume of 65,925 tonnes.
In the first three months of 2018, China exported 43,554 tonnes of peanuts, a rise of 12.4% from the same period of 2017.
This figure of 43,554 tonnes for Q1 2018 comprised 19,116 tonnes in January (13% ahead of the 16,856 tonnes shipped in January 2017); 10,224 tonnes in February (+33.8% from the 7,642 tonnes in the same month a year ago); and 14,214 tonnes in March (-0.2% against March 2017’s 14,224 tonnes).
Despite the marginal dip this March, it is reasonable to assume that China will have maintained a decent level of exports in Q2. Moreover, there is every reason to expect this pattern to continue for the full year, particularly as China had an estimated 18.5 million tonne crop in 2017/18.
Optimism for this year’s export prospects was highlighted at this April’s International Peanut Forum in Athens by Kobe He, product manager at Sinopharm International.
China’s domestic consumption of peanuts continues to grow and this is encouraging production expansion.
He pointed out that quality was also better from the 2017/18 crop. “This year, the peanuts supply exceeds the demand, because this year we definitely have over-supply and the price of peanuts in China can help improve the competitiveness of Chinese peanuts in the international market,” He told delegates at the IPF.
Another factor likely to turn buyers to China is the reduced crop and quality issues from Argentina this year due to the earlier weather problems suffered by this rival origin.
In the first half of 2017, China exported a total of 384,936 tonnes of tomato paste to international markets, a fall of almost 16% on H1 2016 due to a complicated season for Chinese tomato producers.
Late last year, the country’s second-largest tomato paste producer Chalkis announced it would halt production as it could keep up with the government’s strict environmental regulations. As well, the largest producer Cofco said it was planning significantly lower production due to high stocks and lower international prices.
At the time, IEG Vu suggested that Chalkis could afford halting production as it is currently sitting on huge amounts of stocks. This has been clear throughout Q3 of this year, as exported volumes were remarkably higher than in 2017: averaging 68,000 tonnes this year as opposed to 57,000 tonnes on average in 2017.
However, volumes in March 2017 started easing which did not happen in the two previous years to date. With the tomato industry at a standstill, with only the US securing advances in exports so far, IEG Vu suggests that Chinese tomato paste levels have indeed been declining in Q2 2018 but probably picked up as the new processing season approached (sell off of the old stock).
Mirrored data of countries importing tomato paste from China shows that there have been decreases in volumes shipped to traditional markets, but significant advances in the Middle East and Africa.
Previously, this data has proven to be somewhat inaccurate: however, it still serves as a valid point of reference for further analysis.