Dim Sums: Agricultural Markets in China

China's vision for solving global problems through international collaboration in agricultural science under the "one belt-one road" initiative was laid out in an article in State media this week. The head of China's Academy of Agricultural Sciences, Wu Kongming, sees great potential for food production in the abundant water and soil resources and high quality ecological environment of belt-road countries. He said “one belt-one road” agricultural cooperation can promote orderly regional flows of agricultural factors of production and deepen agricultural market integration. Exchange of experience in agricultural development and bringing into play the comparative advantages of each country can maximize the potential for agricultural development, advancing mutually beneficial opportunities for each country, Wu said. According to the article, China's Ministry of Agriculture drew up a vision for banding together various government departments, research institutes, ...

China announced a modest reform of its minimum price purchase program for wheat and rice that  Farmers Daily described as a signal of marketized reform. This year's implementation plan for the program sets stricter conditions for activating minimum price procurement of wheat and rice. Minimum price procurement can begin only when the market price has fallen below the minimum price announced by the government for 3 days in a row. When this happens, the province's branch of Sinograin applies to its headquarters, which in turn seeks approval from the State Administration of Grain and Commodity Reserves to begin minimum price procurement. Minimum price procurement must be suspended when the market price rises above the minimum for 3 days. The document allows only grain of national grade 3 or higher to be purchased at minimum prices. When there are large volumes of grain below grade 3 due to a disaster or other reason, provincial authorities are urged to b...

China's Ministry of Commerce announced today that its antidumping and anti-subsidy investigation of sorghum imported from the United States would be terminated because duties would not be in the public interest. Provisional duties of 179% imposed last month will be terminated and deposits collected will be returned. The Ministry's "Announcement on termination of anti-dumping and anti-subsidy investigation of sorghum imported from United States" [ 关于终止对原产于美国的进口高粱反倾销反补贴调查的公告 ] released May 18, 2018 said the investigation found that duties would raise costs for consumers and impose even more pain on the beleaguered swine industry which is suffering severe losses due to a 30-percent decline in hog prices since the beginning of the year: "In the process of the investigation, the investigating organizations received many reactions from downstream users who told the investigation that downstream livestock farming industry would experience higher costs. The anti-dump...

China is disgorging massive quantities of surplus corn from its reserves, but sales are costing the Chinese treasury billions of dollars. Today China sold 1.4 million metric tons of corn from its "temporary reserve" at an average price of 1,401 yuan ($220.79) per metric ton. Most of that corn had been purchased during 2014 at support prices of 2220 yuan in Heilongjiang Province and 2260 yuan in Inner Mongolia and Liaoning Province. Thus, the sale recovered only about 62 percent of the price paid for the corn when in was purchased about 3 1/2 years ago. Additionally, authorities paid about 5% interest on loans used to buy the corn and about 86 yuan ($13.50) per ton per year to store the corn. The total cost of corn auctioned can be estimated by applying these accounting calculations to auction results reported on www.grainmarket.com.cn. Estimated financial losses from China's auctions of corn from "temporary reserve", 2017-18 Item May-S...

China's foreign investment and cooperation in agriculture must recognize the "deep changes in the domestic and foreign environment," "seize opportunities" and "take the initiative" according to exhortations issued at a Ministry of Agriculture and Rural Affairs meeting of officials responsible for international cooperation held last week . Officials were instructed to guide industries to shift investment to "belt and road" countries and the Indochina region of Southeast Asia. Other edicts were to: establish a complete agricultural trade policy system,  actively participate in negotiations on international rules for trade and investment.  Speed up nurture of a set of major international grain traders and agricultural enterprise conglomerates,  encourage enterprises to optimize their industry and market layout worldwide. The meeting chaired by Minister Han Changfu carefully studied Xi Jinping's thoughts on "rural revitalization...

Two Chinese provinces issued orders to increase soybean planting this spring with promises of a big subsidy. It is unclear whether the "emergency" is a potential shrinkage of soybean imports from the United States or low soybean prices that threaten to derail China's multi-year effort to shift land from corn to soybeans. Jilin Province issued a "circular on 2018 soybean planting task" 《关于下达2018年全省大豆种植面积任务的通知》to township governments ordering local officials to expand soybean planting, and warning them that they must raise their "awareness and political standing" to decisively complete the task. Local officials were told to email their soybean plan to provincial officials by May 2. On April 28, Changchun municipality issued an "emergency notice on implementing the 2018 soybean planting task 《关于迅速落实2018年大豆种植面积任务的紧急通知》which emphasized that "expanding soybean area is an important political task in agricultural production." Heilongjiang Prov...

China's Xinjiang Autonomous Region says it will replace a support price for wheat with market-determined prices supplemented by a bigger direct payment to farmers, according to Grain and Oils News . A grain official said the policy adjustment is intended to address the province's surplus of low-quality wheat which has overwhelmed storage facilities. Since 2004, Xinjiang has set a support price for wheat and given farmers subsidy of 0.3 yuan for each kilogram of wheat they sold to state-owned enterprises. Since 2009, the region has set an annual plan to purchase 1.5 mmt of wheat for a "temporary reserve." An official said that paying farmers based purely on the weight of grain sold encouraged them to produce maximum quantities without regard to quality. The policy was set to ensure that the region -- in China's northwest far removed from the main wheat-producing regions -- could meet its food needs with a small surplus. Instead, an official told Grain and Oils Ne...