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Thursday, February 17, 2011

Data Shows China Can Withstand Droughts

FROM OUR FACEBOOK PAGE: As world commodity prices continue to rise, all eyes are on China's supply constraints due to the country's worst drought in decades. However, China ramped up imports of wheat prior to the drought, and can use some stockpiles to ease price pressures and keep exports stable. The main importer of wheat is Egypt, and many analysts are concerned that lower shipments of wheat to a nation in turmoil will not help the revolution as agriculture prices surge, picking the pockets of the those millions of protesters. Quite an extreme scenario, but I project conditions to stable out. View the entire Facebook Note here.



Chinese wheat dynamics, 2009-10 (annual change) according to USDA
Production: 114.5m tonnes (+1.8%)
Imports: 800,000 tonnes (+67%)
Use: 103.0m tonnes (+0.5%)
Year-end stocks: 60.0m tonnes (+23%)

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