Chinese Lying About Crop Production Shocker

Just like jeans, bacon butties and hairy gay men with huge moustaches, some things never go out of fashion. Cue China and it's crop estimates, I use the word 'estimates' in it's loosest form obviously.

A report from the US agricultural attaché in China says that the 2009/10 wheat crop there was in fact 106 MMT, substantially less than the 114.5 MMT that official Chinese figures currently suggest. That's a 7.5% overestimate.

The widely reported early season drought took it's toll last season, as too did disease, hot and dry winds and rain damage at harvest time, he says.

The corn crop too was also badly affected by drought, coming in at 150 MMT which is some 13 MMT below official Chinese estimates, he adds.

The problem stems from the state subsidy program that rewards provincial government authorities based on the volume of grain that they produce.

Assuming that the figures are correct, and there have been plenty doubting the official numbers for many months, that immediately knocks 4.3% off global wheat ending stocks for 2009/10. And that assumes that previous year's 'estimates' weren't also falsified.

It's no huge surprise let's face it, but it does put things into perspective when you consider that China are supposed to account for almost a third of the world's wheat stocks this year. Or are you going to tell me that this is the first time they've done it? If they've overestimated production by 7.5% for the last eight years then China's 60 MMT of 2009/10 ending stocks simply doesn't exist.

Now that's food for thought, or not as the case may be.