Dim Sums: Agricultural Markets in China

China's agriculture ministry aims to have 10,000 standards for pesticide and veterinary drug residues on the books by 2020, according to an official's speech at an annual government food safety meeting held last week. Livestock products, vegetables, and fish and shellfish tested for harmful substances had a compliance rate of 97.7 percent during the first three quarters of 2017, according to Huang Xiuzhu, Chief Inspector with the Ministry of Agriculture's Agricultural Product Quality and Safety Supervision Bureau. Huang also cited China's 110,000 farm products certified as "non-harmful," "green food," and organic as indicators of food safety. Inspector Huang warned that potential safety problems persist in China's agricultural products. The next steps will be to tighten regulation of chemicals by farmers, complete a five-year action plan to overhaul standards for chemical residue tolerances, and ensure implementation of the standards on farm...

Chinese authorities are thinking about consolidating GMO testing labs and turning them into genuine third-party testing organizations, according to a report in China Business Journal yesterday . One of the motivations for the consolidation is last year's exposure of a GMO testing lab's falsification of testing records and employee qualifications to pass a 3-year audit. There are currently 42 testing centers for GMO plants and animals on the Ministry of Agriculture's list. However, the qualifications of several have already lapsed, and a dozen more are up for renewal in 2017 and 2018. No preparations have been made to audit several testing centers whose qualifications will soon be up for renewal. One researcher told China Business Journal that there are plans to weed out weak labs, and he speculated that the number of testing centers could be whittled down to as few as 10. There are also plans to make the GMO testing centers independent third party organizations. ...

A Chinese soybean industry executive complained about the sector's chronic excess capacity and predicted that Russia would be the main supplier of China's future soybean demand growth. The comments were made by Shi Yongge, the vice-chairman on China's Jiusan Grain and Oils Industry Group at a global oilseed conference hosted in Guangzhou by the Dalian Commodity Exchange last week. Mr. Shi praised the role of China's supply side reform initiative in reviving domestic soybean production this year, but he worried about the sustainability of the shift in planted area away from corn to soybeans. Mr. Shi expects China's soybean imports to reach 93 mmt this year, over 90% of soybeans used in the country. Mr. Shi raised concerns about excess crushing capacity in China. Much of the capacity has been built along the northern coast, and he thinks the northeast region is about to follow suit. China's domestic soybeans are increasingly oriented toward food protein produ...

China Ministry of Agriculture's monthly S&D report sees supply pressure from domestic corn reserve sales and surging soybean imports putting downward pressure on markets. Cotton supplies are "tight" as government reserves shrink below a year's supply. The China Agricultural Supply and Demand Estimates (CASDE) for November 2017 was released Nov. 9, with few changes from the previous month. The 2016/17 corn market year is now complete, and CASDE estimates that demand exceeded supply by 11.2 million metric tons (mmt). The only change in the corn balance sheet from last month was a slight increase in imports to 2.46 mmt. In fact, over the course of the year CASDE made few changes in its corn S&D for 2016/17. A year ago, in its November 2016 report, CASDE estimated that corn supply would exceed demand by 3.8 mmt during 2016/17. The main change since that report is the raising of its initial low-ball estimate of production (213.6 mmt) to the official output sta...

China imported $93.9 billion worth of agricultural products during January-September 2017, according to statistics released by China's Agriculture Ministry . The import value was up 13.4 percent from the same period a year ago. Agricultural exports totaled $53.3 billion, up 1.5 percent from last year. The agricultural trade deficit was $40.6 billion. China's agricultural imports, January-September 2017 Import value Growth from previous year Billion dollars Percent Ag total 93.9 13.4 Cereals 5.0 7.6 Oilseeds 32.3 19.6 Livestock products 18.8 6.5 Edible oils 4.1 15.9 Fruit 5.0 7.5 Cotton and yarn 2.5 44.1 Sugar 0.9 6.8 Vegetables 0.4 0.2 Fish and seafood 8.5 23.3 China is generating plenty of cash to pay for agricultural imports. Agricultural imports during Jan-Sep constituted just 6.8% of China's tot...

As China opens a broader swathe of its territory to meat imports, its livestock producers need to raise their game. So warns a commentary posted on a Chinese pork industry web site last month. Last year, this blog reported that Chinese authorities have been approving dozens of new entry points for meat imports since a 2015 bulletin called for a more tightly regulated and standardized approach to control sanitation and potential disease transmission. Most of these points were located along China's coast.  Last month, a commentary on the Soozhu.com site  called attention to dramatic growth of meat imports arriving at newly-approved inland entry points like Zhengzhou, the first entry point for meat approved in Henan Province and the first inland entry point approved, hundreds of miles from China's coast. According to Zhengzhou Daily , the entry point was set up through collaboration of many companies, including Shuanghui (owner of Smithfield Foods), Congpin (another major po...

Despite its abysmal reputation in food safety, China now thinks it deserves a stronger say in certifying the safety of food in international trade. In an October 10 article in Economic Information Daily , the chief of Zhejiang Province's Ningbo district inspection and quarantine bureau complained that Chinese food exporters face an "invisible wall" of multiple certifications required to sell products in overseas markets. These include process certifications like HACCP and ISO9001, organic standards, halal and kosher certifications, and social responsibility certifications. He complained that certifications are monopolized by foreign organizations who charge high fees, often fail to obey rules, and impose a heavy burden on Chinese food-exporting companies. Another complaint is that certifications are not mutually recognized, leading to duplication in certifications for different markets. Countries don't trust each others' certifications (i.e. other countries do...