Research Of Chinese Barley Supply And Demand

Barley is a kind of important grain crop, and its production area is next to wheat, corn and rice inthe world. Because of its high adaptability and wide distribution, more than150countries or regionscultivate barley in the global. China had the largest barley cultivation area in the world at the beginningof the20thcentury. After the founding of the PRC, the barley sowing area began to decrease gradually inthe crops competition. With the rapid development of beer industry and animal husbandry, the domesticdemand for beer barley and feed barley has increased since the reform and opening up. Domesticproduction can not meet the demand and a large gap between supply and demand has been made up byimports. Since2001, Chinese annual barley imports were about2000,000tons, accounting for1/2of thetotal domestic demand.China has become the world’s largest beer producer countries for11consecutive years since2002.China’s per capita beer consumption has reached the world average level recently, but there is still a biggap between China and developed countries. Domestic per capita consumption of beer, livestock meatand its products still have growth potential which result in the "rigid" state of barley demand.The purpose of this paper is to analyze the barley supply and demand situation of China, and studythe significant factors that affect Chinese barley supply, demand and trade. Using the recent years’ dataof barley production, this paper will predict Chinese barley supply, demand, prices and trade conditionsfrom2013to2025.Based on the adaptive price expectation theory, this paper constructs Chinese barley acreage supplyresponse model measured by sowing area, and chooses panel data of11main production areas from2009to2012to analyze factors influencing barley supply. The estimation result shows that one periodlagged price of barley, one period lagged of barley sowing area, two periods lagged of barley sowingarea and barley-wheat price ratio are important factors which affect Chinese barley supply; Chinesebarley supply lacks short-term price elasticity but is rich in long-term price elasticity; one period laggedof barley sowing area and two periods lagged of barley sowing area have a notable positive effect onbarley snowing area, indicating that the supply of barley has a certain continuity; barley-wheat priceratio has a notable positive effect on barley supply, indicating comparative income will affect farmers’barley planting decisions in some extent.After the analysis of Chinese barley demand, changes in barley demand in various uses will bedescribed. Based on the study, Chinese barley demand model will be established during thetwenty-two-year period1990-2012and use the unit root test and co-integration test method to studyvarious affecting factors of Chinese barley consumption. Then this paper will introduce least squares toestimate parameters of Chinese barley demand model. Estimation results show that the lag issue ofbarley consumption coefficient is0.49, the price of barley coefficient is0.20, which indicate that thebarley lag phase consumption and price are the main factors which influence Chinese barleyconsumption. That is when prices rose1%, consumption will drop0.2%. Because of the large barley imports and high trade dependence in China, we construct an empiricalmodel of Chinese barley imports and the factors related. The results show: Chinese barley importsresponse most sensitive to international market prices among the factors that have influence in barleytrade, and domestic beer production, domestic market price and the upper stage barley imports arefollowed. If the international market prices rose by1%, the imports will drop by0.82%; if the domesticbeer production increased by1%, the barley imports will increase by0.47%; if the domestic marketprices rose by1%, the barley imports will expand by0.22%. What’s more, Chinese barley import hasthe "inertia".Based on the theory of partial equilibrium, we built Chinese barley partial equilibrium model ofdemand and supply from1990to2012. The model consist7functions which react China’s barley insupply, demand, price, import, export, related commodity price and market clearing. Using systemestimation method to determine the parameters of important variables in the model, this paper usesARIMA model simulations to predict the value of some exogenous variables of the model. And fourdifferent scenarios have been built according to the different setting of Chinese per capita income andpopulation growth in the future to forecast Chinese barley of supply and demand situation from2013to2025. Prediction results show that Chinese barley production will continue to shrink, domestic barleyproduction is declining with limit; Barley consumption in China will be enlarged in the short term andstable in the long term; barley market prices will continue to rise; the gap between supply and demandwill continue to exist, imports will be widened, imports scale will extend and the situation is hard tochange.With the trend of fluctuating declining barley supply, growing barley consumption and high barleyimport dependence, improving the comparative income and protecting the scale of domestic specialbarley production scale and giving full play to import trade barley status will have importantsignificance for Chinese barley industry healthy and stable development in future.