China is the world's largest rice producer with low dependence on imports. In 2020, China's rice output was 211.86 million tons, accounting for 37.31% of the world, ranking first in the world. India and Indonesia are the world's second and third largest rice producers respectively. In 2020, the proportion of rice production in the world was 31.97% and 15.91% respectively. At present, the self-sufficiency rate of rice in China is about 98%, which is basically self-sufficient and low dependence on imports.
China is the world's largest rice consumer, and edible consumption is the main source of demand for rice in China. China is the world's largest rice consumer. In 2021, China's rice consumption reached 222185 million tons. From the consumption structure of rice, the main source of demand for rice in China is edible consumption, that is, edible rice. In 2020, edible consumption accounted for 85% of China's rice consumption demand, and industrial consumption and feed consumption accounted for 7.5% and 7.5% respectively.
The market competition pattern of China's rice industry is relatively scattered. Seed market: the Cr5 of China's rice seed market will reach 31% in 2020. Among them, Yuan Longping High-Tech Agriculture Co.Ltd(000998) is in the leading position in the rice industry, with a market share of 12%. However, compared with the world, there is still a certain gap in the concentration of China's rice leaders. According to the statistical data of the National Agricultural Technology Extension Service Center and burning knowledge consulting, the Cr5 of the global seed industry market will reach 52% in 2020. Rice Market: at present, there are many private enterprises in China's rice industry, and the scale of enterprises is small, and the overall competition pattern of the industry is relatively scattered.
China's rice prices are expected to fluctuate in a narrow range in 2022. As China's rice self-sufficiency rate is very high, and Russia and Ukraine are not the world's major rice producers and consumers, the impact of the peripheral market on China's rice market is limited. In terms of demand, the demand of downstream edible consumption for Chinese rice is relatively stable, and the incremental contribution or marginal decline of rice to feed demand. In terms of supply, China's rice output is expected to continue its growth trend in 2022, and the supply is still relatively abundant. At the same time, China's rice storage consumption ratio is at a relatively high level, and there is a certain pressure on the inventory. At present, the acquisition of China's rice market has been fully completed, and the auction of Chen rice with the policy of the State Reserve has recently opened. It is expected that the situation of oversupply in the rice market will not change substantially in the short term, which has formed a certain pressure on the rise of rice prices. It is expected that rice prices will fluctuate in a narrow range in the future. Considering that the State implements the minimum purchase price system for rice, the space for the decline of rice prices is also relatively limited.
Investment strategy: first coverage, giving the rice industry a cautious recommendation rating. At present, China is the world's largest rice producer, with a rice self-sufficiency rate of about 98%, low dependence on imports and few exports. The impact of external markets on China's rice is relatively limited. From the perspective of supply and demand structure, China's rice sink consumption ratio is still at a relatively high level. Under the background of relatively stable downstream demand and steady growth of supply, it is expected that the subsequent loose trend of rice supply and demand is expected to continue, and the space for rice price rise is limited, or mainly in a narrow range. The follow-up can focus on factors such as national policies. In terms of target, it is suggested to pay attention to high-quality enterprises in seed industry, such as Yuan Longping High-Tech Agriculture Co.Ltd(000998) ( Yuan Longping High-Tech Agriculture Co.Ltd(000998) ), Winall Hi-Tech Seed Co.Ltd(300087) ( Winall Hi-Tech Seed Co.Ltd(300087) ), rice planting enterprises, such as Heilongjiang Agriculture Company Limited(600598) ( Heilongjiang Agriculture Company Limited(600598) ), rice processing enterprises, such as Yihai Kerry Arawana Holdings Co.Ltd(300999) ( Yihai Kerry Arawana Holdings Co.Ltd(300999) ), Shenzhen Cereals Holdings Co.Ltd(000019) ( Shenzhen Cereals Holdings Co.Ltd(000019) ), and industrial chain integration enterprises, such as Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) ( Jiangsu Provincial Agricultural Reclamation And Development Co.Ltd(601952) ).
Risk tips: national policies, natural disasters, rising costs, less than expected variety promotion, etc.
