Industrialisation policies driving change in China s wheat milling sector
Industrialisation policies driving change in China's wheat milling sector
The country’s burgeoning food processing and prepared foods industries are not only changing how flour is consumed but also the kinds of wheat and milling technologies required.
Only five years ago, household consumption of general purpose (GP) flour accounted for over 60 percent of the market.
Household consumption is now estimated at below 45 percent and is expected to drop further. Millers are currently in an awkward position: they must invest to respond to the changing market but face an uncertain situation in how they source their raw material. The gap between supply and demand of flour suitable for the modern prepared-foods industry is widening.
Changes to China’s subsidy policy this year will substantially raise the purchase prices for red wheat varieties meaning that flour millers located in the southern growing areas of China, whose principle output is GP flour, will be at an increasing disadvantage in the market.
Millers will either have to outbid the State Reserve to access supply, or else negotiate directly with the State Reserve for supply that could be of questionable quality.
Millers with the scale to operate in both GP and industrial segments and with presence in multiple origination zones, will have a greater range of options when it comes to originating different wheat varieties for blends and supplying those blends to industrial flour users.
To achieve a larger production platform, wheat flour millers must consolidate despite the fact that, in the short run, the blending behaviour that this drives is haphazard and volatile.
Foreign investments in the sector have been restricted, so much of this incremental capacity expansion will come from domestic companies.
Due to the importance of relations with the State Reserve, and as access to import markets is limited to a small number of companies that have import quotas, much of the scale will be achieved by key state-owned enterprises (SOEs).
The need for scale is driven as much by policy as it is by the achievement of stronger negotiating positions with grain suppliers, plus the fact that the major supplier to the industry is the State Reserve system.
Due to platform requirements, preferential access to import quotas, and restrictions on foreign investment, SOEs and select large domestic corporates are the likely primary beneficiaries of the developments in the wheat and wheat flour industries in China.
They are rapidly growing their businesses in order to negotiate with the State Reserve system, which itself is expanding down the value chain into both the GP and industrial flour segments.
This brings into focus one of the more bizarre characteristics of the Chinese commodity markets and the key conflicts along the agribusiness value chains: the end-game in the flour industry looks to be a battle between competing milling SOEs, negotiating with the central supplier SOE, with users of flour in the food industry anxiously awaiting the outcome.
No comments posted yet. Be the first to post a comment
Please enter your name
Please enter your comment
Your comment submitted successfully.Please wait for admin approval.
Some error on your process.Please try one more time.
We require a combine/tractor driver for our 320ha.s of combinable crops on Berkshire Downs, 15miles south of Oxford, near New...
700 acre of combinable wheat and barley crops needing to be harvested. You will join a team of 4 corn carting, cultivating, c...
Our client is at the forefront of British agriculture and represents the interests of farmers and growers across England and ...
Our client has considerable agricultural interests and is seeking a Farming Director. This is a key senior role which is both...
De Lacy Executive has been engaged by a leading and trusted European parts supplier, with strong growth plans for the UK, to ...
Farming UK | Farms and Land
Barbers Rural (13)
Barlow Associates (2)
Batcheller Monkhouse - Haywards Heath (1)
Berrys - Kettering (1)
Bidwells - Perth (1)
Brown & Co - Bury (3)
Brown & Co - King's Lynn (1)
Brown & Co - Norwich (2)
Bruton Knowles (2)
BTF Partnership LLP (1)
Carter Jonas - Cambridge (1)
Carter Jonas - Harrogate (2)
Carter Jonas - North Wales (1)
Carter Jonas - Winchester (1)
Carter Jonas - York (1)
Charnock Bates (1)
Cheffins - Ely (1)
Churchill Country & Equestrian Estate Agents (2)
CKD Galbraith - Aberdeen (1)
CKD Galbraith - Ayr (1)
CKD Galbraith - Castle Douglas (3)
CKD Galbraith - Edinburgh (3)
CKD Galbraith - Galashiels (1)
CKD Galbraith - Inverness (1)
CKD Galbraith - Kelso (1)
CKD Galbraith - Perth (2)
CKD Galbraith - Stirling (10)
Cooper & Tanner LLP (1)
Corum Property (1)
Cruso & Wilkin (1)
Cundalls - Malton (1)
Cundalls - Pickering (2)
David James and Partners - Old Sodbury (1)
David Parry & Co (2)
Dee Atkinson & Harrison - Beverley (1)
Dee Atkinson & Harrison - Driffield (1)
Donald Ross (3)
Edward H Perkins (1)
Edwin Thompson - Berwick upon Tweed (1)
Edwin Thompson - Galashiels (1)
Elstons, Country Land & Estate Agents (2)
enfields - Pontefract (1)
Express Estate Agency (1)
Fine & Country Homes from Mortimers (2)
Fisher German - Ashby de La Zouch (8)
Fisher German - Banbury (1)
Fisher German - Knutsford (1)
Fisher German - Retford (1)
Fisher German - Stafford (2)
Fisher German - Thame (1)
Fisher German Denton Clark - Chester (1)
Fisher German John Sanders - Bromsgrove (1)
Fisher German John Sanders - Worcester (1)
Foster Maddison - Hexham (1)
Foster Maddison - Lanchester (1)
Fox Bennett (1)
Fox Grant - Salisbury (9)
Fox Grant - Sherborne (3)
Fox Grant - Taunton (4)
G. Herbert Banks (2)
Gary Hoerty Associates (1)
George F White - Alnwick (1)
George F White - Wolsingham (1)
Grange Solicitors and Estate Agents (1)
Greenslade Taylor Hunt - Bridgwater (1)
Greenslade Taylor Hunt - Burnham-On-Sea (1)
Greenslade Taylor Hunt - Taunton (1)
Greenslade Taylor Hunt - Tiverton (1)
H&H Land and Property - Carlisle (2)
Hamnett Hayward - Aylesbury Vale and Chilterns (1)
Hamnett Hayward - Thame (1)
Hamptons International - Banbury (1)
Hamptons International - Bath (1)
Hamptons International - Broadway (1)
Hamptons International - Buckingham (1)
Hamptons International - Caterham (1)
Hamptons International - Cirencester (1)
Hamptons International - Deddington (1)
Hamptons International - Epsom (1)
Herbert R Thomas - Cowbridge (1)
Herbert R Thomas - Neath (1)
Hinson Parry & Co - Newcastle-under-Lyme (1)
Hopkinsons Estate Agents (1)
Humberts - Chippenham (1)
Humberts - Marlborough (1)
Humberts - Taunton (1)
J.J. Morris - Cardigan (1)
Lambert and Foster - Cranbrook (1)
Leonards - Hull (1)
Mansell McTaggart - Crowborough (1)
Mansell McTaggart - Forest Row (2)
Mansell McTaggart - Hassocks (1)
Maxey Grounds & Co - Wisbech (1)
McCartneys - Brecon (1)
McCartneys - Craven Arms (1)
McCartneys - Hay-On-Wye (1)
Michael C L Hodgson - Grange-over-Sands (1)
Michael C L Hodgson - Kendal (1)
Michael Graham - Aylesbury (1)
Michael Graham - Buckingham (1)
Michael Graham - Northampton (1)
Michael Graham - Princes Risborough (2)
Morris Marshall & Poole - Newtown (1)
Morris Marshall & Poole - Shrewsbury (1)
Pelhams Equestrian Rural & Land Agents (1)
Perkins George Mawer & Co (1)
Pike Smith and Kemp Rural - Maidenhead (1)
Pike Smith and Kemp Rural - Marlow (1)
Robert Bell and Company - Lincoln (2)
Robert Bell and Company - Woodhall Spa (1)
Rural and Equestrian Ltd (2)
Rural Scene (1)
Savills - Cambridge (1)
Savills - Edinburgh (1)
Savills - Exeter (2)
Savills - Jersey (1)
Savills - London Head Office (2)
Savills - Norwich (1)
Savills - Nottingham (1)
Savills - Telford (1)
Savills - York (1)
Seddons - Bampton (1)
Seddons - Honiton (1)
Seddons - Tiverton (1)
Smiths Gore - Dumfries (2)
Smiths Gore - Edinburgh (1)
Smiths Gore - Oxford (2)
Smiths Gore - Taunton (2)
Smiths Gore - York (2)
Smiths Surveyors (1)
Stags - Barnstaple (1)
Stags - Bideford (5)
Stags - Farm Agency (18)
Stags - Honiton (4)
Stags - Kingsbridge (1)
Stags - Launceston (6)
Stags - Okehampton (2)
Stags - South Molton (1)
Stags - Tiverton (5)
Stags - Totnes (1)
Stags - Truro (2)
Stags - Wellington (1)
Stewart & Watson - Huntly (1)
Strutt & Parker - Banchory (1)
Strutt & Parker - Canterbury (1)
Strutt & Parker - Chelmsford (2)
Strutt & Parker - Chester (1)
Strutt & Parker - Edinburgh (2)
Strutt & Parker - Exeter (4)
Strutt & Parker - Inverness (2)
Strutt & Parker - Morpeth (1)
Wallets Rural Property Services (13)
Williamson and Henry (1)
Willsons Chartered Surveyors - Alford (1)
Woodlands - Northern England (1)
Wright Manley - Crewe (1)
Wright Marshall - Buxton (1)
Wright Marshall - Chester (1)
Wright Marshall - Crewe (1)
Wright Marshall - Nantwich (2)
Wright Marshall - Northwich (7)
Wright Marshall - Tarporley (2)
Wright Marshall - Whitchurch (1)
Youngs RPS - Hexham (1)
Argyll and Bute (2)
Channel Islands (1)
County Durham (1)
Dumfries & Galloway (17)
East Sussex (5)
East Yorkshire (2)
North Yorkshire (8)
Perth and Kinross (2)
Scottish Borders (7)
South Yorkshire (1)
West Midlands (2)
West Sussex (3)
West Yorkshire (4)
Farming UK Holiday Rentals
Argyll and Bute (1)
County Durham (24)
Dumfries & Galloway (7)
East Lothian (4)
East Sussex (5)
East Yorkshire (9)
Isle of Anglesey (2)
Isle of Wight (3)
North Yorkshire (97)
Outer Hebrides (1)
Perth and Kinross (3)
Scottish Borders (8)
South Yorkshire (1)
Tyne & Wear (1)
West Lothian (8)
West Midlands (1)
West Sussex (4)
West Yorkshire (5)
A strong pound and increased red meat imports coupled with a plentiful dome...
Depression is affecting Wales' farming industry and there is a need to use ...
With just one week to go before the final judging and announcement of the w...
A rural law expert has highlighted the importance of good succession planni...
A south Yorkshire dairy farming family is pulling out all the stops to prom...
Predicting what is going to happen to wheat prices is a challenge, but in s...
A Lancashire based livestock theft prevention scheme is aiming to go nation...
A female farmer has been recognised by the farming and conservation industr...
The new Conservative government appears to be preparing to implement cuts f...