Dim Sums: Agricultural Markets in China

China voiced its aspiration to catalyze international agricultural cooperation at a meeting of BRICS agricultural officials hosted in Nanjing this month. In his keynote address, China's agricultural minister offered China's model of intertwining government, research institutes and agribusinesses to promote a tangled mix of foreign aid and commercial investment as a model for cooperation in agriculture among emerging "BRICS" countries. On June 16, 2017, China hosted the 7th meeting of agriculture ministers from BRICS countries   (Brazil, Russia, India, China, and South Africa) in Nanjing. The 200 attendees included agricultural officials, scientists, and agribusiness leaders from the five countries, the UN's Food and Agriculture Organization, the International Fund for Agricultural Development, and the New Development Bank. The first BRICS agriculture meeting was held in Moscow in 2010. Other meetings have been held in Brasilia, Pretoria, Delhi, and Chengdu. Th...

China's farm machinery industry is  looking to trade up to more advanced tractors and equipment, according to officials quoted in Peoples Daily last week . A 13-year-old subsidy for farm equipment purchases failed to break the low-end product mix, so now Chinese officials are keen on subsidizing research and development.  The remarks were made by officials commenting on their inspections of farm machinery manufacturers in Jiangsu and Shandong Provinces, China's leading regions for the ag equipment industry. According to Peoples Daily , progress in retooling the farm machinery industry is a key focus of "supply side reform" and an important means of revitalizing the economy. While China is already the world's top manufacturer of farm machines like tractors, combines, plant protection equipment, agricultural water pumps, officials have targeted the industry as one of ten categories for upgrades in the plan for "China Manufacturing 2025." The inspection...

This month, a Grain and Oils News journalist reported dramatic changes in cropping patterns in parts of China's Heilongjiang Province following the removal of the support price for corn. While the article emphasizes the greater market orientation of planting decisions this year, the journalist's investigations also suggest that fat subsidies account for most of the profits earned by farmers in China's largest grain-producing province. Some traditional soybean-producing areas of Heilongjiang Province where corn was dominant last year have now reverted to soybeans, according to the journalist's survey this month in Heilongjiang, China's northernmost region bordering Russia's Far East and its largest grain producing province. In the northern third to fifth temperature belts--around cities such as Bayan and Heihe--corn production has been cut as much as 70-80 percent this year. Officials have ordered farmers to switch land to soybeans, minor grains, and other be...

China's winter wheat crop is bigger and better in 2017, according to propaganda from the Ministry of Agriculture's Press Office . The harvest was 80-percent complete this week, and high quality, high yields, and an improved mix of varieties are evident, according to the Ministry. Other news reports concur that the winter wheat region of central and eastern China has had good weather for this year's harvest. Only a few areas have been hit by heavy rains that degraded the quality of the crop last year; some areas of Shandong and Hebei reportedly accelerated harvest ahead of expected rain last week. The Ag Ministry reports that its program of coordinated wheat spraying averted pest and disease problems. Agricultural officials also brag that their guidance and quality wheat model-farming areas have increased the supply of high- and low-gluten wheat varieties that wheat millers previously had to import to make western-style breads, cakes, and snacks. A report from China Grai...

China's Ministry of Agriculture cut its estimate of 2017/18 corn output by 1.5 million metric tons in its June "China Agricultural Supply and Demand Estimates" (CASDE) report , based on drought conditions in parts of northeastern China. The yield was cut slightly due to hail that damaged new corn plants in some areas. The new estimate of 2017/18 corn output is about 8 mmt less than 2016/17, and nearly 13 mmt less than 2015/16. MOA now estimates that demand for corn will exceed supply by 1.7 mmt in 2017/18. China corn supply and demand (Ministry of Ag, June 2017) Item Unit 2015/16 2016/17 June 2017/18 May 2017/18 June Planted area 1000 ha 38,119 36,760 35,840 35,590 Harvested area 1000 ha 38,119 36,760 35,840 35,590 Yield Kg/ha 5,893 5,973 5,948 5,947 Production MMT 224.63 219.57 213.18 211.65 Imports MMT 5.52 1 1 1 Consumption ...

China's agricultural imports during the first four months of 2017 totaled $39.8 billion, up 17.2 percent from the same period last year, according to data issued by China's Ministry of Agriculture . Agricultural exports were $22.3, billion, up 2.3 percent. Imports of most items grew at a robust pace, but corn imports were down 82 percent from a year ago, as China focuses on de-stocking its domestic inventory of corn. Sorghum imports were down nearly 20 percent, and imports of distillers grains--hit with antidumping duties this year--are down 77.8 percent. Cassava imports were steady and barley imports were up 170 percent. China's wheat imports rose 94.1 percent from a year earlier due to tight supplies of good quality wheat in China. Tight supplies of good quality cotton also pushed cotton imports up 43.2 percent from last year. Soybean imports were up 18 percent. Rapeseed imports rose 41 percent, as imports filled a gap left by lower sales of depleted rapeseed oil r...

Since early May, China has sold 21.3 million metric tons of corn from its massive reserve through 14 sales and auctions. There are doubts about whether the market can continue to absorb corn at this pace. A mid-April 2017 survey found eight starch mills in northeastern China were operating at full capacity, and millions of tons of new capacity is under construction. The price of corn was down 30 percent from a year ago due to the cancellation of the temporary reserve program. Northeastern starch production had regained its competitiveness, and substitution of imported cassava starch is down. Export rebates for starch encouraged production, and processors were running at full tilt in anticipation of the June-30 end of subsidies for industrial processing of corn. Processors have built up unusually high inventories. Cofeed.com estimates that starch production for the month of May was about 2.1 million metric tons, and they estimate capacity utilization at 75 percent. They estima...

China has unveiled a plan to turn its rural people into a legion of modern farmers. The State Council released " Ideas on Accelerating Formation of a Policy System to Nurture New-type Agricultural Businesses " on May 31, 2017. The document aims to create a prosperous countryside by nurturing diverse types of market-oriented moderate scale farms, cooperatives, and agribusinesses in place of the fragmented, small-scale subsistence farms that have covered China's rural hinterland for centuries. The document calls for setting up a policy system to nurture new-type farm businesses by 2020 that will extend credit to farmers, open diverse market channels, provide training, recruit university graduates to serve as village officials, give farms and agribusinesses favorable tax treatment, and escalate spending on farm aid that complies with WTO rules. China's Minister of Agriculture Han Changfu called the new-type farmer initiative an important document that helps rural pe...