Dim Sums: Agricultural Markets in China

How much grain does China's government have in its bloated reserves? Have local officials duped top leaders by inflating the numbers? Is the grain too rotten to be eaten? It will take more than a year for Chinese officials to get the answers through a massive audit of the sprawling grain reserve system. If it turns out that China doesn't have as much grain as officials thought, there is no promise that the audit results will be revealed to common Chinese citizens or to market analysts. On July 13 China's State Council ordered a complete check-up of national and local grain reserves to find out the actual quantity, quality, and location of the grain. The program will be conducted in a series of steps that will take 15 months to complete by the end of September 2019. On July 26, Xinhua News Service said the grain inventory check-up is urgently needed following the accumulation of grain from price support programs in recent years, “difficulties of managing the reserves,”...

Local officials have been ordered to buy up large volumes of Chinese substandard wheat harvested this summer.  A July 20 document on wheat procurement work in "disaster areas" said large volumes of wheat produced this year do not meet national standards due to lodging, germination, sprouting, and mold caused by heavy winds and rain at harvest time in regions of the middle and lower Yangtze River valley and the Huang-Huai region. The document issued by the National Development and Reform Commission and eight other government organizations and companies orders local governments, grain depots, mills, and banks to buy up the substandard wheat and finance purchases to ensure that farmers are able to sell their off-grade wheat. Insurance companies are ordered to pay out contractually obligated indemnities to farmers and inspections of insurance companies are to be conducted. Agricultural Development Bank managers are ordered to simplify and speed up approvals for loans. Official...

Illegal planting and sale of genetically modified corn seeds is a persisting problem in China. The best way to deal with the problem is to legalize GMOs, Chinese scientists say. An article in Science and Technology Daily this week notes that China's top corn seed company was recently implicated in the illegal sale of 50 kg. of genetically modified corn seed, an incident the company attributes to "internal management problems." The reporter observes that such incidents of illegal sale and planting of GMO corn seeds have appeared regularly in recent years. Industry experts told Science and Technology Daily that the main reason for the persistence of illegal GMO corn-planting is that farmers "love" the seeds. Farmers growing conventional corn have suffered serious losses from pests, and scientists say mold from pest-damaged corn contaminates other corn when the ears are mixed together, resulting in further losses from mycotoxins. China has varieties of corn g...

Great progress in transforming the country's livestock and poultry sector has been declared by China's Ministry of Agriculture and Rural Affairs (MARA). Markets have stabilized, outmoded farms have been closed, and pollution problems are being addressed. First, MARA lauds a rebound in hog and egg markets. Hog prices went through a precipitous decline from February to May this year. The rebound in prices since May has approached the breakeven level, and some efficient farms are making good profits now. Officials say they prevented a more serious disequilibrium by issuing guidance to farmers to reduce herds to tide them over the depressed market. The egg sub-sector has also recovered from a steep drop in the market last year. The average egg price of 8.29 yuan per kg is up 42 percent from a year ago. Meat poultry, beef and sheep production is stable with good profits, MARA says. Second, MARA reports that traditional modes of livestock and poultry production are being transfo...

China can replace U.S. soybeans with imports from other sources, Chinese propaganda says. Drawing from a stable of reliable "experts" and executives of state-owned businesses, State media are spinning China's retaliatory 25-percent tariff on U.S. soybeans as another opportunity to change the world with country's "One Belt, One Road" initiative. A China Central Television broadcast, " Geometry of Soybean Trade Impact ," emphasized that China can shift its sources of soybeans. Li Xiaowei of China National Grain and Oils Information Center says the 25-percent tax will make U.S. soybeans more costly, but the tax will bring about "deep changes" in China's pattern of imports. Cheng Guoqiang, Tongji University professor and former State Council agricultural economist, described the 25-percent tariff as making U.S. soybeans "uncompetitive" and will send a "radical signal to the world market" that will attract new soy...

China's State Council has issued a document guiding Government ministries to push ahead on strategies to promote imports and free trade in the country's "new era" proclaimed by Xi Jinping. The July 2 "Ideas on expanding imports to promote balanced development of foreign trade" (unofficial translation) directed various government departments to carry out practical implementation of the strategic "mutually beneficial opening of the economy" that has been proclaimed by China's leadership. The strategy has multiple objectives: promote imports to better satisfy the rising demands of consumers, speed up institutional innovation, push ahead on upgrades of the economic structure, raise international competitiveness, further expand imports while keeping exports stable promote balanced development of foreign trade, preserve free trade The document is a practical implementation of directives issued at last year's 19th communist party con...

China's grain imports rose to over 3 million metric tons in May 2018 as trade tensions with the U.S. heated up. China is set to assess 25-percent retaliatory tariffs on imports of grains and soybeans from the United States as of July 6. A  Grain and Oils News article reported robust China grain imports during April and May. The combined volume of rice, wheat, corn, sorghum, and barley imports reached 3.1 mmt in May, up from 2.9 mmt in April and about 2 mmt during January and March. Imports were 1.5 mmt during February which included the Chinese New Year. The cumulative imports of rice, wheat, corn, sorghum, and barley totaled 11.5 mmt for January-May, up from 10.9 mmt during the same months a year earlier despite the rise in trade tensions. Barley imports have been consistently strong. China recorded 640,000 mt of sorghum imports during April when China announced a 179-percent antidumping duty (it was terminated May 18). Intrepid buyers imported 470,000 ...