Production

MY15/16 peanut production is forecast at 16.7 million tons, recovering slightly from the estimated 16.5 million tons in MY14/15. Prior to MY13/14, strong domestic demand and favorable prices made peanuts a favorite crop among farmers. However, the rapid production growth, coupled with increased supply of other more competitively-priced oilseed products contributed to a peanut price slump since late 2013. In response to price fluctuations, in MY13/14 the national average profit from peanuts also plummeted to RMB1,869/Ha ($304/Ha) compared to RMB10,128/Ha ($1,608/Ha) in MY12/13.

With lower profits, peanut planting in MY14/15 declined. Correspondingly total MY14/15 peanut production is estimated to fall to about 16.5 million tons. An anticipated smaller production pushed peanut prices up at the start of the MY14/15 crop harvest. The peanut price remains high, up by 40 to 50 percent over the previous year. The MY14/15 peanut price recovery is expected to increase peanut farming profits and exceed that from other cash crops in the large peanut-producing provinces (namely Henan, Shandong, Liaoning and Hebei). This is expected to boost peanut planting area in MY15/16. In general, steady increases in demand for peanut products both as food (snacks and milk) and for cooking (oil) support vigorous peanut production but additional gains are constrained by limited land resources.

Top Five Peanut Producing Provinces

(Area: 1,000 Ha & Prod: 1,000 tons)

MY

MY13/14

MY14/15

Area

Production

Area

Production

Henan

1,037

4,600

1,000

4,550

Shandong

780

3,490

740

3,300

Hebei

356

1,260

340

1,250

Liaoning

342

1,200

340

1,110

Anhui

187

870

180

860

Nation

4,633

16,972

4,500

16,500

Nation Yield

3,663 Kg/Ha

3,667Kg/Ha

Note: Data based on CNGOIC

Trade

Imports

Imports of peanuts for food use are low due to sufficient domestic supply. Imports of peanuts for crushing could potentially increase as China's annual imports of peanut oil have averaged about 70,000 tons in recent years, and China's large crushing sector favors imports of oilseed. That said, China imposes a 15 percent import duty and 13 percent value added tax (VAT) on peanut imports which still hinders the competiveness of peanut imports in the Chinese market.

Exports

Chinese peanut exports are expected to hold steady at around 400,000 tons in MY 15/16, similar to that in MY14/15. A generally stable production combined with strong domestic demand at relatively high prices will lessen incentives to export. Furthermore, strict import conditions in some major export markets will also reduce export interest.

Policy

Beginning in MY 10/11, in an effort to stimulate production and improve the domestic self-sufficiency rate for vegetable oil, the Chinese government implemented a planting seed purchase subsidy for peanuts of about RMB150 ($24)/Ha. As of this report, there have been no major significant policy changes.

PSD Table

Country

China, Peoples Republic of

Commodity

Oilseed, Peanut (1000 tons; 1000 Ha)

2013/14

2014/15

2015/16

USDA Official

Post Estimate New

USDA Official

Post Estimate New

USDA Official

Post Estimate New

Market Year Begin

10/2013

10/2014

10/2015

Area Planted

4,650

4,633

4,850

4,500

0

4,580

Area Harvested

4,633

4,633

4,700

4,500

0

4,580

Beginning Stocks

0

0

0

0

0

0

Production

16,972

16,972

16,500

16,500

0

16,700

MY Imports

15

18

100

50

0

50

MY Imp. from U.S.

0

7

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

16,987

16,990

16,600

16,550

0

16,750

MY Exports

550

550

400

400

0

400

MY Exp. to EU

200

200

200

200

0

200

Crush

8,710

8,710

8,700

8,530

0

8,670

Food Use Dom. Cons.

6,630

6,633

6,500

6,620

0

6,630

Feed Waste Dom. Cons.

1,097

1,097

1,000

1,000

0

1,050

Total Dom. Cons.

16,437

16,440

16,200

16,150

0

16,350

Ending Stocks

0

0

0

0

0

0

Total Distribution

16,987

16,990

16,600

16,550

0

16,750

CY Imports

30

30

30

30

0

45

CY Imp. from U.S.

0

15

0

0

0

0

CY Exports

550

577

560

600

0

600

CY Exp. to U.S.

0

8

0

0

0

0