Dim Sums: Agricultural Markets in China

The official "Voice of China"  listed 31 subsidy programs to apply for in 2018 that illustrate Chinese leaders' plans to transform agriculture. According to Voice of China, agricultural subsidy programs will emphasize aid for businesses engaged in environmental protection, those that increase industry efficiency and those that strengthen food safety. The list below includes the name of each program and the dates for application. (Voice of China also listed the government entity to apply to, but these are excluded here for brevity.) Applicants for these programs must be registered as enterprises (which would include farmer cooperatives, agribusinesses and "family farms" holding a business license, but not individual farmers). They must demonstrate adequate "business management capability" and cannot have a bad social credit score, nor can they be on a black list. Aid cannot exceed the expenses of the project and a project cannot ...

China's agricultural output grew marginally, farming's share of the economy continued to shrink, and farm prices were down sharply for a number of commodities during 2017, according to  agricultural production data released by the National Bureau of Statistics last week . Value-added in agriculture, forestry, and fishing grew 4.1 percent during 2017, slower than China's overall GDP growth rate of 6.9 percent. The primary sector's share of GDP continued its decline, falling to 7.9 percent of GDP during 2017. Investment in agriculture is growing rapidly, making up for years of neglect. According to the Bureau's investment data , fixed asset investment agriculture, forestry and fisheries grew 11.8 percent during 2017, faster than the 7.2-percent growth in total fixed asset investment and one of the fastest-growing sectors. However, agriculture still received just 3.9 percent of all China's fixed asset investment during 2017. (...

A recent spurt in Chinese corn prices works against China's "supply side structural adjustment" which aims to shift production from corn to other crops to reduce excess supplies of corn. Profitability of corn could undermine these plans by inducing China's farmers to plant another huge corn crop this spring while the world is already awash in excess corn supplies. The January 2018 China Agricultural Supply and Demand Estimates (CASDE) explained that farmers in the northeastern provinces have been holding back corn in anticipation of rising prices. The influx of cash from corn producer subsidies recently distributed allowed them to pay back loans without having to sell corn to generate cash; this allowed them to hold on to their corn longer. However, CASDE says the national average wholesale corn price is expected to remain stable at 1600-1700 yuan/mt, "constrained by high inventories." An MOA news conference on the 2018 outlook for agricultural markets...

China is seeking a more influential and assertive role in global agriculture and is making agriculture part of broader geopolitical initiatives in its new era of "agricultural diplomacy" under Chairman Xi Jinping. Is China ready for this role? Is the world ready for China? The strategy was laid out in " Our Country's Agricultural Diplomacy Enters a New Era ,"a December 26, 2017 propaganda essay by Farmers Daily propagandists. The writers expounded on the more prominent role given to agriculture in foreign affairs since Xi Jinping ascended to the top leadership position five years ago. The article recites "Chairman" Xi's slogans that proclaim China as now open to the outside world. It cites key international meetings where agriculture was emphasized, with special emphasis on Xi's kick-off of the One Belt One Road initiative during a 2013 summit with Kazakhstan's president. The "clear message" proclaimed by ...

Chinese authorities announced that they will hold sales of old wheat from reserves beginning January 18, 2018 at reduced starting bids. Wheat purchased through the price support program during 2014-16 will be offered at a minimum bid of 2410 yuan/metric ton, 50 yuan lower than previously. Sales will also be held for wheat purchased in the Xinjiang Autonomous Region (which is not part of the formal minimum price program, but has its wheat price supported by "temporary reserve" purchases). Wheat with excessive mycotoxin levels will be designated for sale to ethanol producers at discounted prices starting at 800 yuan/mt. Sprouted 7-year-old wheat from Xinjiang will also be sold at a discount starting at 1200 yuan/mt. In addition, authorities will offer imported wheat from 2013 stored in 16 different provinces at prices varying from 2160 to 2490 yuan/mt. Wheat from 2012 shifted among provinces will be offered at prices from 2030 to 2330 yuan/mt. The first auction of 411,937...

A school soccer competition will promote cheese consumption in Beijing, bringing together President Xi Jinping's passions for sports and upgrading Chinese industries, according to a December 2017 announcement by the Ministry of Agriculture's press office. The "Dream Cup" is an open competition for teams from Beijing schools sponsored by a Beijing dairy company that will promote cheese consumption by students. But it is also much more than that. The cheese soccer activity illustrates the growing personality cult of Xi Jinping and ambitions to bring together disparate elements of society to achieve lofty national goals, with communist party coordination in the background. "D20" dairy industry leaders pose with school children July 2017. Source: Ministry of Agriculture . According to the announcement, the cheese-centered soccer competition is an implementation of the "spirit" of the 19th communist party congress held in October and a "meas...

Chinese authorities are considering another reduction in support prices for rice in 2018 to move toward market pricing, dissipate their huge stockpile, and stem a surge of imports, market analysts say. With a record crop of 208.56 million metric tons (about 146 mmt after milling) in 2017, China's rice supply is more than adequate. As of December 25 , 62.5 mmt (presumably rough rice; 43.75 mmt after milling) of the fall rice crop had been purchased (34.7 mmt medium grain and 27.8 mmt long grain), 2.3 mmt more than a year earlier. P rocurement of the summer-harvested early indica rice crop totaled 9.16 mmt (6.4 mmt milled basis), up 570,000 mt from the year before. An August rice market analysis estimated  that the government's rice stockpile could be a record-high 100 million metric tons (apparently on a rough basis; 70 mmt milled basis), or about 80 percent of a year's consumption. The analyst's estimates were based on authorities' annual procurement of about...