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Showing posts from April, 2015

Food for Tibet Earthquake Emergency

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Chinese authorities are mobilizing food supplies for regions of Tibet  that were also affected to varying degrees by the April 25 earthquake that hit Nepal. The earthquake produced landslides, caused houses to collapse, and 7 people were killed in Tibet. Chinese news outlets are reporting the Nepal earthquake as 8.1, higher than the 7.8 reported by news outlets in the rest of the world. Grain Bureaus are sending emergency grain supplies to the affected regions to ensure that the military and local population (in that order) are adequately supplied with food. The Tibetan regions include Nyalam, Gyirong, and Tingri Counties in Xigaze Prefecture and Burong County of Ali Prefecture. Effects of earthquake in Tibet Grain is being distributed as part of the work of a temporary earthquake relief leadership group established in Tibet. The Chengdu branch of Sinograin, China's grain reserve-management company in neighboring Sichuan Province, is also ...

Soybeans: What Target Price Subsidy?

Reports from Heilongjiang Province suggest that China's pilot "target price" subsidy program for soybeans is accelerating the decline in the country's soybean production.  The target price subsidy pilot replaced the "temporary reserve" price support program for soybeans and cotton in 2014/15. The program allows market supply and demand to determine a market price. The government will estimate the average price for the marketing season, calculate the difference between the target and market prices and pay farmers a direct subsidy based on that difference (if the market price is less than the target). The soybean target price of 4800 yuan per metric ton was announced in May 2014. The market price has been well below the target since last fall's harvest, but the government still has not announced the average market price that will be used to calculate the subsidy. Farmers say they were not happy with the market price after last fall's harvest. The...

Q1 2015 Downshift in China's Ag Economy

The National Bureau of Statistics report on China's economic indicators for first quarter 2015 reveals a tension between inflationary wage pressure and policy support of grain prices against broader downward pressure on prices. The NBS report says that "Primary Sector" GDP--mainly agriculture--was up 3.2 percent in Q1 2015. That's about 1 percentage point slower than its customary 4-to-5-percent growth rate in recent years. It's also less than half the 7 percent growth rate for all GDP, an indicator that agriculture's share of the economy continues to decline as China's overall economic growth downshifts. Another telling indicator buried in the tables in the Chinese version of the report is a 3.6 percent decline in the number of rural migrant workers during Q1 2015. This has to be the first decline since they started reporting this statistic. The declining number of migrant workers is an indicator that there are fewer construction sites and that facto...

China Cracks Down on Agricultural Smuggling

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According to news from Guangzhou , customs authorities there have broken up a beef smuggling ring that is suspected of illegally bringing 1351 loads of meat valued at 560 million yuan since 2014. The gang allegedly bought frozen beef from the United States, Brazil, India, and Pakistan, and smuggled it into China by either evading customs, falsely reporting, or concealing the meat. The beef was cut up, packaged and then sold in Chongqing, Nanjing and Shanghai.The investigation involved 230 officers in Guangzhou, Shenzhen, and Foshan. They arrested 28 people as of April 7 and seized 24 metric tons of meat. The beef case is part of the China customs "green wind" crackdown on agricultural products smuggling that began in 2014. Anti-smuggling efforts were also highlighted in the 2015 "Number one document" issued by the communist party central committee. Officials claim to have cracked 13,316 cases valued at nearly 45 billion yuan. The number of cases is reported to ...

Xinjiang: Switch From Cotton to Hay

With a surplus of cotton and falling prices, Chinese officials have cut their target price for this year's cotton crop and are urging farmers in the major production region to shift cotton acreage to wheat or hay. The 2015 target price for cotton in Xinjiang Autonomous Region has been set at 19,100 yuan/metric ton. This is the target for the crop to be planted this spring and harvested in fall of 2015.  The subsidy is based on the difference between the target price and the market price. As of April 3, 2015, market prices for cotton lint in Xinjiang ranged from 12,950 to 14,200 yuan--depending on the grade--far below the target price. The target price for the 2014 Xinjiang cotton crop was higher, at 19,800 yuan. The subsidy for the 2014 crop has just been distributed and totaled 450.5 yuan per mu (about $441 per acre). Agricultural officials in Xinjiang say the target price pilot program allows market supply and demand to be the main guide fo...

Wheat Quota Spins Profit for COFCO

COFCO, China's State-owned agribusiness giant, gets more wheat-import quota than the rest of the industry combined. With imported wheat 30-percent cheaper than Chinese wheat, COFCO's favored access to imports make easy money that offsets losses on the company's other operations. According to news in March , COFCO had been given 1.5 million metric tons of wheat import quota so far this year, more than the 900,000-mt combined total distributed to private-sector companies. China has had record wheat harvests in the last few years, but it has a shortfall of the types of wheat needed to make western-style breads and baked goods. These products are in strong demand, but Chinese farmers are not producing these types of wheat in adequate quantities. Last month industry people said Chinese traders had purchased 300,000 mt of no.2 high protein white wheat from Canada and 100,000 mt of Australian prime hard wheat. Wheat can only be imported by traders awarded a share of the go...

High Corn Seed Prices Reflect Disdain for Soybeans in China

Prices are soaring for a type of corn seed suited for planting in cold climates, an indicator that corn is continuing to displace soybeans in China's far-north agricultural fringe. A report from China's Grain and Oils News says that the price of Demeiya No. 1 corn seed has doubled from 675 yuan per bag to 1375 yuan in some areas of Heihe, a region of Heilongjiang Province that borders Russia. Each bag contains 50,000 seeds, said to be enough to plant 7.5 mu. Demeiya No. 2 and No. 3 seeds are sold by weight, and their price has risen from 18.5 yuan/500g to 22.5 yuan/500g. Demeiya is a variety of corn developed by German seed company KWS to grow in northern climates where the growing season is short. The seed was introduced in China as result of a link-up between KWS and Kenfeng Seed, a company linked to the State farm system in Heilongjiang Province which controls large tracts of land along the border with Russia. Demeiya seed was introduced in the earl...