Posts

Showing posts from December, 2016

China Corn Price Dips Again

Corn prices in China fell about 15 percent over the past month after a brief rebound during October-November. Chinese officials would like to export some of their surplus corn in 2017, but they are not willing to let their price fall low enough to be competitive on the world market. According to an analysis by cofeed.com , tight supply conditions in the early months of China's 2016/17 corn marketing season have reversed. The peak season for corn sales has arrived, and weather and logistics factors that constrained corn marketing during October-November have now been alleviated. Cofeed says that farmers in northeast China have given up their reluctance to sell their corn after receiving their corn producer subsidies. They need to raise money to pay off loans and prepare for the Chinese new year holiday. Demand for corn in China, meanwhile, is tepid. Hog farmers have stepped up their slaughter as the peak consumption season approaches, and there is little impetus to expand among ...

Controversy on GMO Ban in China Province

Image
A Chinese Province has banned planting genetically modified crops for five years. The ban has a complicated back story which includes another cynical manipulation of food safety hysteria to protect a province's soybean industry. According to Xinhua News Agency , the ban was adopted this month as a revision of Heilongjiang's 4-year-old food safety regulations . The new regulation passed by the standing committee of the province's Peoples Congress stipulates that genetically modified food crops--specifically rice, corn, and soybeans--may not be planted in regions administered by the province starting May 1, 2017. It also bans the illegal production and marketing of genetically modified grain seeds, as well as illegal production, processing, and sale of food products containing GMOs. The regulation bans illegal imports or smuggling of GMOs. The regulation demands that genetically modified agricultural products and foods containing genetically modi...

China B-ball League Blames Doping on Pork

A Chinese basketball star appealed his suspension for failing a doping test by arguing that he must have accidentally ingested the banned substance through something he ate. Such allegedly inadvertent doping incidents have become so common that the Chinese Basketball Association has told teams to require their players to eat all meals in team hotels. Tao Hanlin, star player for the Shandong Hi-speed team in the CBA, f ailed a doping test prior to a game on November 29 . He has been suspended from league play since then. The Shandong team has lost 5 of 8 games since Tao was suspended. Tao tested positive for "lean meat powder" (瘦肉精), a colloquial name used in China for a class of beta agonists that are used to build muscle. Clenbuterol is the most common one. These compounds are used by bodybuilders to build muscle mass, but farmers also use them (illegally) to raise pigs and other livestock with a higher proportion of muscle instead of fat. The use of beta agonists in rai...

Farm Costs "Strangle" Competitiveness in China

China's high farm production costs stem from high land rents, incompatibility of fragmented fields with mechanized farming, and tenants' disincentive to make long-term investments, according to a recent article in Economic Information Daily . The article zooms in on bottlenecks in a countryside set up for small-scale subsistence farming that are "strangling" the competitiveness of newly commercialized Chinese farmers caught between the "floor" of rising production costs and the "ceiling" of low prices for imported commodities. The director of a government grain-buying station in Jiangxi Province identifies high costs as the root problem that keeps Chinese farmers from being internationally competitive. "If we don't address this problem, the volume of grain imports will be hard to reduce," he warns. The director of rice producers cooperative in Jiangxi said land rent of 350 yuan per mu per crop --farmers here commonly grow two rice...

China Grain Output Falls--First Time Since 2003

Image
China's National Bureau of Statistics has reported that the country's grain production fell during 2016. This is the first decline reported by the Bureau since 2003, breaking China's string of 12-straight increases in grain output. A senior statistician with the Bureau explained that the decline in output was the result of simultaneous declines in both area planted and yield. The Bureau estimates that 33 percent of the decrease in output was due to shrinking area planted and 67 percent was due to lower yields. China 2016 grain production statistics Area planted Yield Production 1000 ha kg/ha 1000 mt Grain 113,028.2 5,452.1 616,239 Cereals 94,370.8 5,988.8 565,165 Corn 36,759.7 5,972.7 219,554 Rice 30,162.4 6,860.7 206,934 Wheat 24,186.5 5,327.4 128,850 Beans 9,710.5 1,781.0 17,294 Tubers 8,946.9 3,775.5 33,779 Other* ...

China's porous borders facilitate ag product smuggling

Smuggling of agricultural products over China's porous borders has become rampant as Chinese prices are now far above prices in neighboring countries. Rice is one of the most commonly smuggled commodities since China has a long border with major rice producing countries. Customs officials say they caught 57 gangs smuggling 218,500 metric tons of rice and other grains valued at over 1 billion yuan during the first ten months of 2016. A Chinese reporter went to Nanning, Kunming, and Wuhan to investigate how rice is smuggled into the country. At a remote part of the border with Vietnam as many as 1000 small boats crossed the 70-80-meter wide Red River loaded with rice. Rice also comes in over small roads through the mountains. In a crackdown there last year authorities claim to have seized 2400 metric tons of smuggled rice in a single day. Authorities have built a number of concrete barriers--including a 100-meter reinforced concrete wall--to stop the smuggling. However, payof...

CASDE Dec 2016

The China Agricultural Supply and Demand Estimates (CASDE) for December have only a few modest tweaks to the estimates compared with November. Most changes were made in the corn estimates. 2016/17 corn production was raised 1.05 million metric tons (mmt), to 214.65 mmt. Corn consumption was raised 450,000 metric tons, to 210.72 mmt. The carry-out was increased by 600,000 mt. CASDE forecasts China's 2016/17 corn inventory to expand by 4.43 mmt. Imports are kept at a minimum level of 1 mmt for 2016/17. CASDE revised upward their view of the 2016/17 corn crop. They raised harvested area to 36.016 million hectares, essentially equal to their planted area of 36.026 mil. ha. The yield was also revised upward to 5960 kg/ha from last month's 5935 kg/ha estimate. Compared with last year, CASDE estimates that 2016/17 corn area and yield are both down from 2015/16. The estimate of China's corn output for 2016/17 is down 4.4 percent from 2015/16, yet the inventory is still expected...