Increasing openness of agriculture in our country since wto accession, the interaction of two markets both at home and abroad and deepening, accurately grasp the international agricultural product market characteristics and the status of China’s agricultural competitiveness and agriculture are faced with the problem, open for better use of two resources, two markets as a whole to ensure the healthy development of the domestic agricultural is very important.
Trends and characteristics of supply and demand in international agricultural products market.Throughout the history of world agricultural product supply and demand and market changes over the past 50 years, the international agricultural product supply and demand and market have the following 7 significant characteristics and trends.
The international supply and demand of agricultural products are basically in balance, but regional shortages and food insecurity are prominent, and the risk of food crisis always exists. From 1961 to 2012, the global output of major agricultural products such as grains, oils and meat kept rising, higher than the population growth rate in the same period, and the per capita share increased steadily. But the regional imbalance, the difference is obvious. Developed countries produce too much food and developing countries are short of it. There are still 800 million hungry and undernourished people in the world. The balance between annual food supply and demand is also unstable. During this period, there were also three world food crises in the early 1970s, early 1990s and 2008, and the threat of food crisis has never been eradicated.
Relative to the effective demand with purchasing power, the international agricultural products market is abundant in supply, which has been oversupplied for quite a long time. Although there are a lot of poverty and malnutrition in the world’s population, but due to its lack of purchasing power, the demand for agricultural products cannot be converted to effective market demand, the international agricultural products market in a long period of general oversupply situation, surplus agricultural products processing and international agricultural products market price is too low has been a big problem of the international community. According to the statistics of unctad and fao, the real price level of major agricultural products in the world has been declining for a long time, but only in recent years has it started to rise due to the development of biomass energy. Over the past decade, global grain stocks have remained above the food security warning line.
The volume of grain trade in the international market accounts for a limited proportion of total grain production, and the basic grain supply capacity mainly depends on domestic production. The proportion of global grain trade in output is relatively low, remaining around 12% to 13.5% from 2001 to 2012. In contrast, the degree of trade liberalization of soybeans is relatively high, with trade volume accounting for 37.2% of production in 2012. This shows that, from a global perspective, food supply mainly depends on domestic production, and world food trade only contributes to less than 15% of global food supply.
Overall, there is great potential for supply growth in the international market and an effective response to China’s growing demand. But international markets are also risky. There is the risk of short-term, local shortages and food crises, of increased price volatility, of monopoly by multinational corporations and of increased control by major exporting countries. The characteristics of the international agricultural product market and supply and demand determine that we should not only make full use of it, but also prevent excessive dependence and risks.
Status quo of Chinese agricultural competitiveness
Agricultural burden of living costs are high, agricultural cost reduction is difficult. The cost of production in China is higher than that in the United States mainly because of the high cost of labor and land. Land rent and labor cost are actually converted into farmers’ income, which is an important source of supporting farmers’ livelihood. Therefore, the difference in the production cost of bulk agricultural products between China and the United States is essentially the difference in the livelihood cost borne by the two countries’ agriculture. In other words, the high production cost of bulk agricultural products in China is mainly due to the high livelihood cost of supporting the agricultural population. According to FAO data, China has about 5 agricultural people per hectare of arable land, 0.014 in the United States, 0.1 in the European Union and 0.6 in Japan. In addition, the construction of China’s rural social security system started late, and agriculture has significant multi-functional characteristics. It bears a variety of non-commodity functions such as food security, social security, environmental protection and rural development. The realization of these functions is at the cost of efficiency, which also weakens the competitiveness of China’s agriculture to some extent.
Of course, is said to have comparative advantage in the labor-intensive products in China, through moderate scale management, social service, science and technology progress and other measures to enhance the competitiveness of agriculture is still a certain scope, but on the whole, agriculture in our country, especially in agricultural commodities industry compared with the world’s leading exporter, there is a huge gap based competitive and difficult to change. With the improvement of China’s resident income level and the rise of agricultural labor opportunity cost, this gap will further expand, and the lack of agricultural basic competitiveness and high production cost will become more and more prominent.